Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BARCLAYS BANK BILL

Read a Second time and referred to the Examiners of Petitions for Private Bills.

BOURNEMOUTH CORPORATION BILL

Read a Second time and committed.

BRIGHTON CORPORATION BILL

To be read a Second time upon Tuesday next.

BRITISH RAILWAYS BILL

To be read a Second time tomorrow.

CARDIFF CORPORATION BILL

Read a Second time and committed.

CITY OF LONDON (VARIOUS POWERS) BILL

To be read a Second time upon Tuesday next.

DERBY CORPORATION BILL

DERBYSHIRE COUNTY COUNCIL BILL

Read a Second time and committed.

ESSEX RIVER AND SOUTH ESSEX WATER BILL

To be read a Second time tomorrow.

FARMER & COMPANY LIMITED (TRANSFER OF REGISTRATION) BILL

Read a Second time and referred to the Examiners of Petitions for Private Bills.

GREATER LONDON COUNCIL (GENERAL POWERS) BILL

To be read a Second time Tomorrow.

GREATER LONDON LOCAL RADIO AUTHORITY BILL

To be read a Second time upon Tuesday next.

HARDY BROTHERS LIMITED (TRANSFER OF REGISTRATION) BILL

Read a Second time and referred to the Examiners of Petitions for Private Bills.

LONDON TRANSPORT BILL

To be read a Second time upon Tuesday next.

LUTON CORPORATION BILL

To be read a Second time Tomorrow.

NATIONAL WESTMINSTER BANK BILL

Read a Second time and referred to the Examiners of Petitions for Private Bills.

NORTH EAST LINCOLNSHIRE
WATER BILL

NORTHAM URBAN DISTRICT
COUNCIL BILL

TEES AND HARTLEPOOL PORT
AUTHORITY BILL

TEESSIDE CORPORATION BILL

Read a Second time and committed.

WALSALL CORPORATION BILL

WELLAND AND NENE (EMPINGHAM RESERVOIR) AND MID-NORTHAMPTONSHIRE WATER BILL

WEST BROMWICH CORPORATION BILL

WOLVERHAMPTON CORPORATION BILL

YORK CORPORATION BILL

To be read a Second time upon Tuesday next.

Oral Answers to Questions — NATIONAL FINANCE

Income Tax (Artists)

Mr. Winnick: asked the Chancellor of the Exchequer if he will introduce legislation that will allow artists the same tax arrangements as writers.

The Minister of State, Treasury (Mr. Dick Taverne): I have noted my hon. Friend's suggestion.

Mr. Winnick: While I am grateful, in a sense, for that Answer, may I ask my hon. Friend to agree that since writers, playwrights and composers are allowed to spread their tax arrangements over three years' work, it is wrong and an anomaly that artists are not allowed to do the same?

Mr. Taverne: That is the very point we had noted.

Mr. Channon: Would not the Minister agree that a whole range of anomalies exist in this sphere? Will he at least look into the matter, because his hon. Friend is right about this?

Mr. Taverne: I cannot add to what I have already said.

£ Sterling

Mr. Ridley: asked the Chancellor of the Exchequer if he will now float the £.

The Chancellor of the Exchequer (Mr. Roy Jenkins): No, Sir.

Mr. Ridley: Do not we seem to be in a period when exchange rates are constantly coming under pressure? Rather than trying to adjust these by taking it out on the British people by savage taxation and deflation, would it not be better to let currencies find their own levels?

Mr. Jenkins: Apart from the fact that it would be contrary to our obligations under the I.M.F. articles of agreement, I do not think that it would have the beneficial consequences which the hon. Gentleman suggests.

Investment Overseas

Mr. Ridley: asked the Chancellor of the Exchequer if, in the light of the Reddaway Report, he will introduce legislation to remove the fiscal discouragement to direct investment overseas.

Mr. Kenneth Baker: asked the Chancellor of the Exchequer, in view of the conclusions of the Reddaway Report on the medium-term beneficial effects of overseas investment on the United Kingdom balance of payments, whether he will review the restrictions placed upon such investment in 1965.

Sir G. Nabarro: asked the Chancellor of the Exchequer what steps he is taking to implement the recommendations of the Reddaway Report, notably concerning overseas investments.

The Chief Secretary to the Treasury (Mr. John Diamond): I would like to take this opportunity to thank Mr. Reddaway and his colleagues. Their Report is a valuable contribution to the analysis of the return on alternative uses of resources and deserves careful study.
But it does not call for any modification of the Government's policies in this field. The authors accept that direct controls of overseas investment may be necessary at times of balance of payments pressure, and their conclusions contain nothing to justify more favourable tax treatment of direct investment abroad.

Mr. Ridley: Is the Chief Secretary aware that he has come to the wrong conclusion? Is he aware that the Reddaway Report and the Economic Research Council document, just published, make it abundantly clear that this Government have been living on the "tick" earned by foreign investment overseas? Will he now take immediate steps, in view of this wrong diagnosis and fiscal discouragements on overseas investments, to remove these fiscal discouragements?

Mr. Diamond: There is nothing in what the hon. Gentleman has said which would cause me to alter my view, nor are there any fiscal discouragements. The fiscal system is neutral for overseas investment.

Mr. Baker: Would the right hon. Gentleman not agree that the Reddaway


Committee found two things: first, that overseas investment pays off in 11 years, and then constitutes a net inflow into our invisible earnings, and secondly that home capital is not hit by investment overseas? In view of these two conclusions, will he not relax tax restrictions upon overseas investments?

Mr. Diamond: May I repeat, there are no tax restrictions. The tax system is designed to be completely neutral. There were certain tax incentives, advantages, which have been removed.

Sir G. Nabarro: Is it not a fact, leaving aside the fiscal disincentives to overseas investment, that the policy of the present Government, manifest now for four years, and evidently as it will be projected in future, will mean the total abandonment of British overseas investment, if continued?

Mr. Diamond: No. The hon. Gentleman is quite wrong on both points. The first point I have dealt with twice, and I will not insult the House by making it a third time. As to his second point, the present arrangements under exchange control and under the voluntary programme are designed to give preferential treatment to the most promising projects. That is the policy, that will continue to be the policy.

Mr. Henig: Will my right hon. Friend confirm that investment in British industry is much more beneficial, for the long-term economic growth of this country, than investment abroad?

Mr. Diamond: I have given the figures on many occasions.

Mr. Patrick Jenkin: Is the Chief Secretary aware that having heard his answers, the House will come to the conclusion that it will now have to wait until a Tory Government does justice to this question of overseas investment? Does he recognise that part of that programme of reform would involve the reform of the whole structure of Corporation Tax?

Mr. Diamond: This House is a very patient place, but not as patient as all that.

Savings

Mr. Grant: asked the Chancellor of the Exchequer what steps he is taking

to increase private savings; and if he will make a statement.

Sir G. Nabarro: asked the Chancellor of the Exchequer whether he will make a statement on contractual savings by individual workers, and on methods to be employed generally to increase the attractiveness of personal savings.

Mr. Roy Jenkins: I am considering a number of possibilities for increasing savings, including a contractual savings scheme, but I am not yet ready to make a statement.

Mr. Grant: Is the Chancellor aware that some of us, indeed his own Financial Secretary, for years have been pressing for a new initiative in savings? If and when he brings in his contractual scheme, will he provide that there can be investment in equities, and if necessary building societies, and not just National Savings?

Mr. Jenkins: I shall certainly consider and be anxious to protect the position of building societies. Also I will consider the position of equities. I am also anxious to protect the position of the National Savings movement.

Sir G. Nabarro: Will the right hon. Gentleman confirm that the relative unattractiveness of the present arrangements for National Savings could not have been more evident than in last year's results, when there was an increase of only £70 million in National Savings compared with a £330 million increase in unit trusts?

Mr. Jenkins: The hon. Gentleman is making a point diametrically opposite to that of his hon. Friend. In other words, he is asking me to favour National Savings as against equity investment.

Sir G. Nabarro: No. I am asking the right hon. Gentleman to make them more attractive.

Mr. Jenkins: The hon. Gentleman's choice of words is always interesting, but I do not think that what he has said in any way detracts from the point I was making.

Sir R. Cary: May I ask the Chancellor of the Exchequer whether discussions are taking place between himself and the Chairman of the National Savings movement? Can he say whether the reports


that have appeared in the Press about the progress of those meetings are reasonably accurate?

Mr. Jenkins: I would not like to say that I have seen all the reports which appear in the Press, let alone give an indication as to their accuracy or otherwise.

Valuation Appeals (Basingstoke)

Mr. David Mitchell: asked the Chancellor of the Exchequer on how many occasions the valuation of the present Basingstoke district valuer has been the subject of appeals heard by the Lands Tribunal in respect of valuations at Basingstoke; and in how many of these cases the award of the Tribunal has exceeded the valuation of the district valuer.

Mr. Taverne: Four, as opposed to over 780 settled by agreement. In all four cases the Lands Tribunal award exceeded the district valuer's assessment, but in three of them the awards were nearer to his figure than to the amounts claimed by the vendors.

Mr. Mitchell: Is the Minister aware that many more people would have appealed to the Lands Tribunal if they were not frightened of the costs involved?

Mr. Taverne: These cases are often difficult and the considerations of appeal are often ones which have to weigh these conflicting balances against each other.

Mr. David Mitchell: asked the Chancellor of the Exchequer by what sum of money the Lands Tribunal found that his Department's local district valuer had under-valued compensation due on a compulsory purchase valuation at Basing-stoke, following the most recent appeal in this matter.

Mr. Taverne: By £183,000, part of the difference arising from a question of law rather than of valuation.

Mr. Mitchell: Does the Minister admit that there is a substantial difference, quite apart from a matter of law? Would he not agree that this is an unsatisfactory state of affairs? What does he propose to do about it?

Mr. Taverne: The answer to this Question has to be read with the answer given

to the last Question, which showed that in three out of four cases, the district valuer's valuation was much closer. I am sure that the district valuer has done his best to arrive at a fair valuation in each case. I am sorry that this has led to difficulties, or rather resentment, in certain cases.

Mr. Mitchell: In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest available opportunity.

Wealth Tax

Mr. Gwilym Roberts: asked the Chancellor of the Exchequer what is the latest estimate available of the percentage of the population which owns 75 per cent. of Great Britain's personal wealth; what estimate he has made of the number of people who have private wealth amounting to over £2 million, over £200,000 and over £20,000, respectively; if he will estimate the yield from wealth taxes payable by such persons; and what plans he has for the introduction of wealth taxation.

Mr. Taverne: It is estimated that in 1967 about 10½ per cent. of the population aged 15 and over owned 75 per cent. of the wealth owned by individuals, and that in that year there were about 14,000 people with wealth amounting to over £200,000 and 596,000 with over £20,000.
It is estimated that a 1 per cent. tax on all wealth owned by individuals in excess of £200,000 would yield about £40 million, and on wealth in excess of £20,000 would yield about £240 million. No estimate can be made for individuals with over £2 million. At this time of year my hon. Friend will not expect me to make any statement about the last part of his Question.

Mr. Roberts: Would not my hon. and learned Friend accept that any society where one has this maldistribution of wealth is not only unjust but is basically inefficient, irrespective of the control of wealth? Will he not agree that the urgent introduction of a wealth tax would make it far easier for the industrial workers to bear the ramifications of the prices and incomes policy?

Mr. Taverne: I certainly agree with my hon. Friend that there is a maldistribution of wealth in the country. As to the second part of his question, he is asking me to comment on what may or may not be considered for a Budget.

Mr. Biffen: Is the hon. and learned Gentleman not aware that his Government have a record of unhappy and malicious hostility towards private capital, and that the best he could do to offer at least some atonement would be to make an outright rejection of the suggestion of his hon. Friend?

Mr. Taverne: I am not commenting one way or the other on the last part of my hon. Friend's Question. As to the first point of the hon. Member's supplementary question, my heart bleeds for those whose share values have suffered so very considerably.

Mr. Shinwell: In view of the figures my hon. and learned Friend has given, is he able to say how long it will be before we reach the objective of the Labour Party—an egalitarian society?

Mr. Taverne: I can tell my right hon. Friend that over the last few years there has been a process whereby the distribution of wealth has become somewhat less concentrated.

Mr. Lubbock: In calculating the potential yield from such a tax, has the hon. and learned Gentleman taken into account the fall in revenues which would have been received from other sources? Before introducing any new taxes will he please bear in mind the urgent need for simplification of those that we already have?

Mr. Taverne: All I was concerned to answer in the Question was the actual yield of a 1 per cent. wealth tax at different figures. As for tax changes, at this time of the year one cannot give details, or even answers, to such questions.

Cost-of-Living Bond

Mr. Gwilym Roberts: asked the Chancellor of the Exchequer what would be the value in real terms at the present time of £100 saved in 1916, in 1938, in 1950 and in 1960, respectively; and if he will introduce a cost-of-living bond whose

value and interest return will be related to real money values through the retail price index.

Mr. Diamond: Without taking account of any capital gains or losses or interest the respective values of £100 saved would be about £25, £27, £56 and £77. The answer to the second part of the question is, "No, Sir".

Mr. Roberts: Quite apart from the question of the need for wealth taxation, does my right hon. Friend agree that there is also a short-term need to help the small saver, that the small saver is discouraged from saving by the strong fall in the value of money over the last 50 years, and that one of the best ways of helping small savers would be to introduce a cost-of-living bond with a provision for a limited holding, which would avoid some of the problems of transfer?

Mr. Diamond: I understand my hon. Friend's point. I refer him to the speech which my right hon. Friend made at Budget time, which dealt with this very question.

Sir G. Nabarro: Do not the figures quoted by the junior Minister on the Treasury Bench in answer to this Question demonstrate that savings over the years continuously lose their value? Is not this a major contributory reason to the poor performance of National Savings last year?

Mr. Diamond: I do not accept what the hon. Gentleman is trying to demonstrate. The totals in National Savings at the end of last year amounted to £8,534 million.

Mr. Higgins: Does the Chief Secretary believe that the imposition of a wealth tax would increase or decrease total savings?

Mr. Diamond: The hon. Gentleman is a little behind the times. That was the last Question.

International Monetary System

Sir B. Rhys Williams: asked the Chancellor of the Exchequer what steps he has taken since the monthly meeting of the Bank for International Settlements in December to obtain international agreement to a new system for obtaining


orderly movements in exchange rates; and if he will make a statement.

Mr. Sheldon: asked the Chancellor of the Exchequer if he will make a statement on the international monetary situation.

Mr. Cronin: asked the Chancellor of the Exchequer what progress has been made in discussions on the international monetary situation.

Mr. Roy Jenkins: As I said to the House on 25th November, I think it is right that we should think carefully and afresh about the present international monetary system. This process is bound to take some time and I do not think that an international conference would be helpful at this stage. Meanwhile we must work with the present system, improving it as we can, for example by bringing the scheme for special drawing rights into operation as soon as possible.

Sir B. Rhys Williams: Is it not obvious that all currencies are more or less subject to inflation and that therefore over the course of time they are bound to diverge in value? Would it not be better to take account of this fact by an orderly system of variations in exchange rates instead of waiting until it is inevitable to make some catastrophic movement?

Mr. Jenkins: I do not follow the hon. Baronet's argument. To the extent that all the currencies are subject to inflation there is no reason why they should diverge in value. If they do diverge in value, it is for reasons different from that. I am not convinced that a change such as the hon. Baronet suggests would necessarily be the best way of bringing about orderly movements.

Mr. Sheldon: Since the new American Administration have taken over the previous one's responsibility for the price of gold and accepted their view, will my right hon. Friend consider that, although it may not be necessary to have these big international conferences, what might be very helpful would be to continue discussions with interested Governments so that at least some progress is being made at this level?

Mr. Jenkins: It is desirable to have discussions with interested Governments

on a very wide range of subjects, and I shall certainly welcome these with the new United States Administration and the new United States Secretary to the Treasury. I do not think that it is desirable to raise a wide range of issues and I do not think that an ill-prepared major international monetary conference would help to give stability to the present situation.

Mr. Cronin: I congratulate my right hon. Friend on the admirable progress which has been made so far, particularly at Basle. Will he nevertheless consider having informal discussions with a view to strengthening swap arrangements and increasing their flexibility?

Mr. Jenkins: I am grateful for what my hon. Friend has said. I will continue to consider all these matters.

Mr. Biggs-Davison: Has the Commonwealth Economic Consultative Council instituted any study of this important matter which was mentioned at the Conference of Commonwealth Prime Ministers recently?

Mr. Jenkins: I am certainly in constant and rather closer touch than has hitherto been the practice with Commonwealth Finance Ministers.

P.A.Y.E. and National Insurance Contributions

Sir B. Rhys Williams: asked the Chancellor of the Exchequer what progress he has made in his studies of ways to reduce the burden on employers of calculating income tax and graduated National Insurance contributions; and if he will make a statement.

Mr. Taverne: No changes are proposed in relation to the machinery of P.A.Y.E. As regards National Insurance, I would refer the hon. Member to the White Paper on Earnings-Related Social Security which my right hon. Friend the Secretary of State for Social Services is presenting to Parliament today.

Sir B. Rhys Williams: Has the hon. and learned Gentleman appreciated the enormous administrative advantages of ending the old-fashioned system of including negative allowances in the Income Tax system and replacing them with positive allowances of equal value?

Mr. Taverne: I am aware that the hon. Gentleman has in fact written a pamphlet on this subject. The only thing that can be done at present is to abolish the stamp that is being proposed in the White Paper and to make contributions to pensions payable through the P.A.Y.E. system.

International Monetary Fund (Scarce Currency)

Mr. Bruce-Gardyne: asked the Chancellor of the Exchequer what study he has given to the reactivation of the scarce currency clauses of the International Monetary Fund rules; and if he will make a statement.

Mr. Roy Jenkins: That part of the scarce currency provisions of the Articles of Agreement of the International Monetary Fund which permits the Fund to replenish its holdings of strong currencies by borrowing has been used. No useful purpose would be served by trying to activate the remaining provisions in present conditions.

Mr. Bruce-Gardyne: Does not the right hon. Gentleman agree that no monetary system is likely to work unless in the last resort there is some provision for external corrective for countries which are either unable or unwilling to correct a long-term surplus or deficit position as suggested in the I.M.F. rules, to which he drew attention earlier? Does not the right hon. Gentleman further agree that the present proposals for the recycling of monetary movement are designed merely to perpetuate surpluses and deficits?

Mr. Jenkins: With the very general statement with which the hon. Gentleman began I think I would agree. I think that the scarce currency clause has been to some extent activated and to some extent superseded by the general agreement to borrow in 1962. In any case, as the hon. Gentleman knows very well indeed, any procedure on these matters could be dons only with agreement. The activation of the scarce currency clause has never commended itself to the American Government and would pose very considerable problems within the European Economic Community.

Balance of Payments

Mr. Sheldon: asked the Chancellor of the Exchequer what estimate he has now made of the balance of payments outturn for 1969.

Mr. Bruce-Gardyne: asked the Chancellor of the Exchequer if he will now make a statement on the balance of payments outturn for 1968 and his latest estimates for the corresponding figure for 1969.

Mr. Marten: asked the Chancellor of the Exchequer if he will make a statement on the balance of payments for the second half of 1968.

Mr. Cronin: asked the Chancellor of the Exchequer what estimate he has made of the balance of payments outturn for 1969.

Mr. Dickens: asked the Chancellor of the Exchequer if he will make a statement on the estimated balance of payments outturn in 1969.

Mr. Roy Jenkins: I have nothing to add to the Answer given to a similar Question on 21st January.—[Vol. 776, c. 229–30.]

Mr. Sheldon: Since the level of exports unfortunately is not going ahead as rapidly as was hoped for, and since there is probably little more that can be done to help in this direction, will my right hon. Friend turn his attention to the other side of the equation—the level of imports—in a situation where he can act; and will he do something about the obsessional fear that the Treasury has concerning import quotas?

Mr. Jenkins: The Treasury has no obsessional fears. My hon. Friend is not right in saying that the level of exports is not going ahead as rapidly as was hoped. In fact, we are ahead of our export hopes. As my hon. Friend and the House knows, imports, although they have not increased but have indeed turned down slightly, have remained at a stubbornly high level during 1968, but the House will also be aware that I took certain measures on 22nd November.

Mr. Bruce-Gardyne: Does the Chancellor of the Exchequer recall that 1968 was the fourth successive year in which


he and his predecessor forecast a balance of payments surplus for Britain? Can he tell us specifically what is the latest status of his current forecast of a £500 million surplus at the end of 1969? Has it slipped back into 1970 yet or been downgraded?

Mr. Jenkins: Not unnaturally, I suppose I recall 1968 better than the preceding years. I did not in fact forecast a balance of payments surplus. I forecast that we would be in surplus in the second part of the year. We were not in surplus, though the second half of the year was a very substantial and a very necessary improvement on the first half of the year; and I believe that that improvement will continue throughout 1969.

Mr. Marten: Is it not these very judgments which turn out to be wrong which affect the confidence which people can have in our economy? Did not 1968 have the biggest visible trade gap since 1951? How does that compare, for example, with what the Prime Minister was saying at the General Election—again a false judgment?

Mr. Jenkins: It is a very partial look at the balance of payments to single out the visible trade gap. By taking invisibles one has a very different picture, and by taking that balance of payments as a whole there is a different and better picture than one had in 1964. The hon. Member was, therefore, taking partial figures.

Mr. Cronin: Irrespective of the pressures which will be put on him, will my right hon. Friend continue his policy of moderate restraint of consumer expenditure until the balance of payments is under satisfactory control?

Mr. Jenkins: I certainly intend to continue to take whatever measures are necessary to improve the balance of payments.

Mr. Dickens: Does not my right hon. Friend agree that one of the great weaknesses in 1968 was the £456 million of private capital which left this country in the first nine months of the year, the highest figure in any year since 1945? Will he not now learn the lessons of that and take steps in 1969 to restrict private portfolio investment going to Australia and South Africa?

Mr. Jenkins: I would make two points to begin with. First, the point made by my hon. Friend is in direct contradiction to the points put to my right hon. Friend the Chief Secretary from the benches opposite in arguing that we were completely starving the country of overseas investment. Secondly, as I have pointed out to my hon. Friend previously, it is misleading to take the gross outflow without taking the net capital position, which, although, in my view, not satisfactory—certainly not in the first six months of the year, although in the third quarter there was a substantial surplus in capital account—is very different from the picture given by taking merely the outflow without dealing with the inflow as well.

Mr. Barnett: Would it not be more realistic and still quite satisfactory to talk of a surplus for 1969 at the rate of about £200 million rather than £500 million? Would not this give us greater opportunity for a higher level of growth and employment?

Mr. Jenkins: No, I do not think so. Indeed, the position in 1968 from a growth point of view has not, I think, been unsatisfactory. Nineteen sixty-eight was a strong year for growth and, I may say, has been almost the only year for a decade or more past—the only year, I think—in which we have combined a reasonably high rate of growth with an improved balance of payment position. In every other year in which we have had a substantial rate of growth, we have had a worsening balance of payment position. We need it to improve still further, but it has been improving considerably with a high rate of growth.

Mr. Higgins: Will the Chancellor publish in the OFFICIAL REPORT an amended forecast taking into account the actual performance of the economy as against the figures which he originally put in the Financial Statement?

Mr. Jenkins: No, Sir. I put figures in the Financial Statement. I intend to put some figures in the next Financial Statement.

Sir Knox Cunningham: They will be wrong.

Mr. Jenkins: It is no good the hon. and learned Member bleating out


that they are wrong in that way. What I have indicated—

Sir Knox Cunningham: They are wrong.

Mr. Jenkins: What, I think, is generally the view of the House is that it is desirable and contributes to intelligent discussion, in which I do not expect the hon. and learned Baronet to join, that we should publish the working assumptions, knowing perfectly well that no forecasts will ever be right in all respects.

Mr. Grimond: Will the Chancellor continue to publish his assumptions, which are at least a great step forward from what we had before? As, however, publication of the monthly trade figures has a considerable effect on the confidence on which the balance of payments ultimately depends, are they not becoming more and more misleading as large shipments may take place in or out in any given month? Is the right hon. Gentleman considering publishing the figures in any different form?

Mr. Jenkins: This is primarily a matter in the first instance for my right hon. Friend the President of the Board of Trade, who publishes the figures. I have, however, considered the point and I think that it would be a mistake not to continue with monthly publication. It is increasingly important that publication, whilst giving all the basic facts, should be in such a form as to stress the underlying trends, and I believe that there is indication that people, both here and outside this country, are coming increasingly to look to the underlying trends rather than merely to the fluctuations, which can be very wide from one month to another.

Sir Knox Cunningham: On a point of order. Owing to the unsatisfactory nature of the Chancellor's reply, I will raise the matter again.

Mr. Manuel: The hon. and learned Member will not. He never does.

Registrar of Friendly Societies (Report)

Mr. John Page: asked the Chancellor of the Exchequer why the annual report of the Registrar of Friendly

Societies for 1967 will not be published before 18th December, 1968, in view of the fact that the returns about trades unions required by the Registrar have to be in his hands by 1st June in any year; and whether he will take steps to speed up this process.

Mr. Taverne: Preparation of the Registrar's report requires analysis of the returns of more than 400 trade unions, and this is a considerable operation. Furthermore, returns by a number of larger unions were up to three months late. Printing took a further two months after the report had been completed. The arrangements are being examined with a view to somewhat earlier publication of the report in future years.

Mr. Page: I am grateful to the hon. and learned Gentleman for trying to hasten the process, because the length which he has described seems unnecessary, especially the two months for printing. Is the reason why some of the unions were late in sending their reports the fact that they had difficulty in dealing with the documents of the nearly quarter of a million trade unionists who contracted out during the year due to dissatisfaction with the Labour Government?

Mr. Taverne: The timing of the returns is governed by the Trade Union Act, 1871. The delay is nothing unusual.

Members of Parliament (Expenses)

Dr. Winstanley: asked the Chancellor of the Exchequer if he will seek the consent of Members of Parliament to the publication of information regarding the present level of expenditure, wholly, necessarily and exclusively incurred by them in the performance of their Parliamentary duties.

Mr. Diamond: I am circulating with the OFFICIAL REPORT a table in similar form to tables previously published which classifies the amounts of Members' expenses allowed for Income Tax purposes against their remuneration as Members of Parliament for the year 1967–68, the latest year for which figures are available. The table includes only those cases where final figures are available. Ministers have not been included.

Dr. Winstanley: Is the right hon. Gentleman aware that I am grateful for that indication that the Government do not intend to perpetuate a system under which the only control of a professional Government is that of an amateur House of Commons? Does he agree that it is time that the public were made aware of the true financial position of those hon. Members who are not in receipt of outside subsidy and that the only tools with which hon. Members have to do their work are those which they provide themselves?

Mr. Diamond: I hope that the figures in the table will be of satisfaction to the hon. Member.

Mr. Barnett: Is it not absurd that inspectors of taxes are now trying to assess the private part of an hon. Member's London flat, for example, where his wife happens to join him occasionally? Will my right hon. Friend look at this again or ask the inspectors to look at it again?

Mr. Diamond: I will, of course, look with care at anything which my hon. Friends ask me to look at, but my hon. Friend would be the first to join me and to share the view that Members of Parliament should continue to be treated exactly like every other member of the public in their tax assessments.

Sir A. V. Harvey: In the context of this Question, will the right hon. Gentleman consider the position of servants of the House of Commons? Does he not agree that it is absolutely disgraceful when one hears that the widow of a servant of the House is left penniless?

Mr. Diamond: That is a matter for hon. Members personally. [HON. MEMBERS: "No. For the Government."] That is a matter for Members personally. As the hon. Member is, no doubt, aware, those who wish to help are able to do so. The Question on the Order Paper deals with expenses.

Mr. Shinwell: Has not my right hon. Friend missed the point raised by the hon. Member for Cheadle (Dr. Winstanley) that the public are not aware of the expense incurred by hon. Members and are of the opinion that the salary of £3,250 is retained by hon. Members?

Mr. Diamond: My right hon. Friend will see from the table that that very information is given. It is a detailed table, but it indicates that the majority of hon. Members incur expenses, which are allowed for Income Tax, of between £1,000 and £2,000 a year.

Mr. Lubbock: Why are many items and expenditures, such as railway travel and newspapers and journals which are essential in the performance of the Parliamentary duty, not allowed against the Parliamentary salary? Will the right hon. Gentleman revise the rules so that these items can be allowed against tax?

Mr. Diamond: The answer to the hon. Member is that these rules apply to all holders of an office or of employment. All Schedule E taxpayers are treated in the same way. If the hon. Member is suggesting that a Member of this House is being singled out for adverse treatment, I would be only too glad to look at his suggestion.

Following is the table:


Expenses allowed

Numbers of Members


£ £




0–99
…
…
…
1


100–199
…
…
…
1


200–299
…
…
…
1


300–399
…
…
…
2


400–499
…
…
…
5


500–599
…
…
…
6


600–699
…
…
…
6


700–799
…
…
…
9


800–899
…
…
…
6


900–999
…
…
…
10


1,000–1,099
…
…
…
17


1,100–1,199
…
…
…
15


1,200–1,299
…
…
…
19


1,300–1,399
…
…
…
19


1,400–1,499
…
…
…
20


1,500–1,599
…
…
…
16


1,600–1,699
…
…
…
9


1,700–1,799
…
…
…
18


1,800–1,899
…
…
…
11


1,900–1,999
…
…
…
13


2,000–2,099
…
…
…
5


2,100–2,199
…
…
…
8


2,200–2,299
…
…
…
8


2,300–2,399
…
…
…
5


2,400–2,499
…
…
…
5


2,500–2,599
…
…
…
5


2,600–2,699
…
…
…
2


2,700–2,799
…
…
…
1


2,800–2,899
…
…
…
1


2,900–2,999
…
…
…
1


3,000–3,099
…
…
…
4


3,100–3,199
…
…
…
2



251

Finance Ministers (Meeting)

Mr. Barnett: asked the Chancellor of the Exchequer what discussions he has had about convening a further meeting of the Finance Ministers of the Group of Ten.

Mr. Roy Jenkins: None, Sir.

Mr. Barnett: Does not my right hon. Friend agree that the last meeting at Bonn did not really solve anything, and would it not be better to have new talks now in the comparative peace of the present situation rather than wait for a new crisis?

Mr. Jenkins: No, Sir. I do not agree that the last meeting at Bonn solved nothing. It solved certain problems and made substantial progress. However, assuming that my hon. Friend is right, I find it a little difficult to follow why the fact that one conference was unsuccessful—which I do not accept, as I say—should be an argument for having another.

Mr. Barnett: asked the Chancellor of the Exchequer what discussions he has had on bilateral and multilateral swap arrangements since the meeting of Finance Ministers of the Group of Ten in Bonn in November, 1968.

Mr. Roy Jenkins: As foreshadowed in the communiqué issued after the Bonn meeting of the Group of Ten, discussions have been taking place between central bank governors about possible ways to alleviate the impact on reserves of speculative movements.

Mr. Barnett: Does not my right hon. Friend agree that the monthly reports of failures that one reads about as coming from Basle, where the governors meet regularly, are not particularly helpful to stability, and could he say when he expects to be able to make a report on the success of these arrangements?

Mr. Jenkins: I should not like to give a definite date. Nether do I think that one should be pessimistic about failure at Basle. There have been substantial successes at Basle during the past year, not least relating to the Basle agreements mentioned earlier. The questions raised by my hon. Friend are complicated, involving several countries, and it would

be dangerous for me to give an exact forecast of when a statement could be made. However, if the outcome is of significance to the United Kingdom's financial position, I promise that I shall announce it to the House.

Mr. Bruce-Gardyne: Will the Chancellor of the Exchequer now answer a question which I asked him earlier on this matter? Does he not agree that proposals for recycling monetary movements can only involve, and are designed to involve, the perpetuation of both surpluses and deficits? Further, while he is on the subject, will he ensure that we have time for a debate on the Basle agreement?

Mr. Jenkins: That raises wide-ranging questions, one relating to a supplementary question on a previous Question, and another raising a matter for the Leader of the House, and it would not be entirely appropriate for me to deal with that. However, I agree that recycling arrangements do not deal with the root of the problem, though one can have flows which arise for speculative reasons and not purely from imbalance in the trade position.

Income Tax

Mr. Stratton Mills: asked the Chancellor of the Exchequer at what weekly wage the following persons commence paying income tax, namely, a single man, a married man without children, a married man with one child under 11 years of age, and a married man with two children under 11 years of age.

Mr. Taverne: About £5 9s. 0d., £8 8s. 0d., £11 5s. 0d. and £12 7s. 6d. respectively.

Mr. Stratton Mills: Do not those figures clearly demonstrate that the starting point for Income Tax for people with low incomes is far too low, and could this be borne in mind when the Budget proposals are being framed?

Mr. Taverne: In his last Budget speech, my right hon. Friend the Chancellor of the Exchequer said that he regarded the raising of the threshold in easier circumstances as a high priority. I cannot add to that.

Mr. Onslow: asked the Chancellor of the Exchequer if he will take steps to


ensure that no taxpayer is obliged to pay Income Tax on income he does not receive.

Mr. Diamond: My hon. Friend the Financial Secretary is in correspondence with the hon. Member.

Mr. Onslow: How much money has been stolen from taxpayers by this means since this indefensible state of affairs was created?

Mr. Diamond: The answer to the hon. Gentleman's exact question is, "None, Sir."

Central Bankers (Basle Meeting)

Mr. Stratton Mills: asked the Chancellor of the Exchequer if he will make a statement on the meeting of central bankers in Basle over the weekend of 7th December.

Mr. Roy Jenkins: No, Sir.

Mr. Stratton Mills: Will the right hon. Gentleman confirm that no communiqué was issued after these talks? Is not that undesirable, since it gives ground for rumours, and will this be considered at future meetings?

Mr. Jenkins: I am not sure that the issue of a communiqué necessarily suppresses rumour, particularly if talks take place in a rumour-mongering atmosphere, as was the case that weekend, now some weeks ago, to which the hon. Gentleman refers.

Tax Revenue

Mr. Edward M. Taylor: asked the Chancellor of the Exchequer what has been the increase in the total sum collected in taxation, comparing the year 1964–65 with the estimate of tax revenue in the year 1968–69.

Mr. Diamond: After making the appropriate adjustments for S.E.T. refunds and the change to investment grants, but before making the necessary adjustment for increased prices, £3,711 million.

Mr. Taylor: Is not this a frightening figure, and does it not show that, in the short period of four years, there has been an increase of about £6 a week in the tax burden of the average family in Britain? How can the Government expect to solve their economic problems

so long as enterprise and initiative are so stifled in this way?

Mr. Diamond: I do not accept that enterprise and initiative are stifled at all; they are encouraged.

Mr. Rankin: Can my right hon. Friend give any examples of aircraft purchased from this country by the United States?

Mr. Diamond: I think that we are ahead of my hon. Friend. He is on the previous Question, which was not asked.

Mr. Peyton: What did the right hon. Gentleman mean in his original Answer by the reference to increased prices? Is it not totally wrong to take this into account, when the Government themselves have a large measure of responsibility for increases in prices?

Mr. Diamond: No, Sir. I just wanted to make the point that, when one is measuring a distance, one should use a constant ruler.

Oral Answers to Questions — CAPITAL INVESTMENT

Mr. Winnick: asked the Prime Minister which Ministers have special responsibility for controlling the outflow of capital and overseas investment.

Mr. Ridsdale: asked the Prime Minister which Ministers have special responsibilities for the inflow of capital investment from overseas.

The Prime Minister (Mr. Harold Wilson): These matters are within the responsibility of my right hon. Friend the Chancellor of the Exchequer.

Mr. Winnick: Is not stronger action required to defend our currency and our country against some of the speculators in the City, who are politically motivated at this time? Is my right hon. Friend aware that many people consider that, while the Labour Government are in office, the real House of Lords is the City of London, and some of the people working there do not seem very keen about democracy and the Parliamentary process?

The Prime Minister: I have noted my hon. Friend's views. The Question asked which Minister was responsible. I have no doubt that my hon. Friend will seize


a suitable opportunity to put Questions to the responsible Minister.

Mr. Ridsdale: On the question of policy as regards making it easy for foreign capital to take over British industry too cheaply, as an alternative to protectionist policies will the Prime Minister stop attacking British capital, encourage savings and stop the overtaxing of capital?

The Prime Minister: The Question asks which Minister has responsibility, and that Minister is my right hon. Friend the Chancellor of the Exchequer, who was busy answering Questions when I intervened at 3.15. He has further Questions down. If I get through these Questions fast enough, he will still be answering Questions.

Mr. Maclennan: What arrangements exist for co-ordination of policy between the Minister of Overseas Development and my right hon. Friend the Chancellor in matters of overseas investment?

The Prime Minister: The same as in all relationships between the Chancellor of the Exchequer, my right hon. Friend the Chief Secretary and spending Departments.

Mr. Farr: Has not devaluation made it easier for foreign firms to invest in this country, and, as some sections of our industry are now wholly owned by overseas interests, will the position be looked at afresh?

The Prime Minister: The hon. Gentleman knows of the power which my right hon. Friend is able to exercise in each case on its merits in relation to foreign and other overseas bids for British firms.

Oral Answers to Questions — DISABLED DRIVERS (PETROL TAX)

Mr. Marten: asked the Prime Minister what communication he has received from the Disabled Drivers' Association concerning petrol tax; and what reply he has sent.

The Prime Minister: The general secretary of the Association wrote to me on 20th December, and a reply was sent from my office on 23rd January.

Mr. Marten: It is much better that we do not involve disabled drivers in

party politics, and I know the Prime Minister's own interest in this matter, but will he have a word with the Chancellor of the Exchequer before the Budget to see whether the £5 allowance relating to duty on petrol could be increased in the light of the recent increases in the petrol duty, especially since the disabled are, in the main, immobile and usually in the lower income groups?

The Prime Minister: I agree that this should not be treated as a matter of party politics. However, the hon. Gentleman will know that, while there is, naturally, strong feeling on the matter—I am well aware of it—the cost of what he proposes would be considerable in terms of Government expenditure, and it is the general desire of the House that Government expenditure should be kept to a minimum. At the same time, I know that he will be delighted to learn, despite what I have just said, that expenditure on cars and other vehicles for disabled drivers has increased from just over £2¼ million five years ago to nearly £5 million this year.

Mr. Molloy: Does not my right hon. Friend agree that in all forms of taxation there are exceptional cases calling for exceptional legislation, and is not the case of the disabled driver worthy of special attention?

The Prime Minister: Yes, Sir; it ought to be continuously looked at and considered. I know that, although I have referred to the effect on Government expenditure, my hon. Friend also will be glad that, in our priorities for Government expenditure, we have more than doubled the provision for cars and other vehicles for disabled drivers.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS (CHRISTMAS HOLIDAYS)

Mr. Biggs-Davison: asked the Prime Minister what were the arrangements for the manning of Government offices during the Christmas holidays.

The Prime Minister: Each Department makes arrangements appropriate to its circumstances, taking account both of efficiency and of the need to ensure that necessary services to the public are maintained.

Mr. Biggs-Davison: While public servants should have good holidays, particularly when they are overloaded by Socialism, can the Prime Minister refute the damaging allegations made in the News of the World that certain important Government Departments did not even answer the telephone on the Friday after Christmas?

The Prime Minister: I do not think it is my job to comment on allegations made in the News of the World. The hon. Gentleman will, no doubt, be aware that the practice of an additional day at Christmas goes back 50 years and was consolidated in a Treasury circular in 1920. It was, therefore, the practice during the 13 years when hon. and right hon. Members opposite were in Government. Whether civil servants then were overloaded by one thing and another, such as preparations for the Rent Act, and so on, is a matter for the hon. Gentleman.

Oral Answers to Questions — PRIME MINISTER OF NORTHERN IRELAND (DISCUSSIONS)

Mr. Hector Hughes: asked the Prime Minister when he plans to hold further discussions with the Prime Minister of Northern Ireland.

The Prime Minister: I have nothing at present to add to what I said in the House last Thursday.—[Vol. 776, c. 657–61.]

Mr. Hughes: Does not the Prime Minister think that such a meeting would have the constructive effect of enabling Ulster to settle down into the paths of toleration, democracy and peace, having regard to his own wisdom and experience?

The Prime Minister: Having regard to all those factors, the House, I think, has shown, on every exchange we have had on this question, a united desire that Northern Ireland should be able to settle down in the paths of democracy, peace and order, and I do not feel that I can add anything to help in that direction by further comment today. I think that everything which can be said and needs to be said has been said. Now it is a matter for Northern Ireland.

Sir Knox Cunningham: Does the Prime Minister's pledge not to intervene in the constitutional position of Northern

Ireland still hold good, or does it now depend upon whether the democratically elected Parliament of Northern Ireland selects Captain O'Neill or someone else to be Prime Minister?

Hon. Members: Ah.

The Prime Minister: The pledge which has been given, and which indeed, was first given by Lord Attlee, remains. The hon. and learned Gentleman knows, of course, that this House may, in a certain situation, have a duty to act under Section 75 of the Government of Ireland Act, 1920. It is the last thing, I think, most of us would want to have to do. The hon. and learned Gentleman could also help in this matter. He could have helped by putting his name down more speedily to the Motion put down on this question and signed by all the other Northern Ireland Members of Parliament.

Mr. Ogden: Is my right hon. Friend aware that every Member of the House, with the possible exception of the hon. and learned Member for Antrim, South (Sir Knox Cunningham), will hope that the present Prime Minister of Northern Ireland achieves a massive vote of confidence in the debate tomorrow and that he will be able to go on to implement the proposals which he has already announced, and be able to strengthen them by adding the final one which I think it highly necessary and desirable, that there should be implementation of one man, one vote, and redistribution of ward boundaries before 1970, so that Northern Ireland can go ahead united in the United Kingdom of Great Britain and Northern Ireland?

The Prime Minister: I have nothing to add to what I have said on past occasions on all the questions raised by my hon. Friend and the tributes which have been unitedly paid to the Prime Minister of Northern Ireland by hon. Members. With reference to any vote which may take place in Northern Ireland tomorrow, it is not a matter for me, or, I would suggest, for this House.

Sir Knox Cunningham: On a point of order. Is it in order for the Prime Minister to instruct Members of the House of Commons how to carry out their Parliamentary duties?

Mr. Speaker: I have heard nothing out of order.

Oral Answers to Questions — COMMISSION ON INDUSTRIAL RELATIONS

Mr. John Page: asked the Prime Minister whether he will make a statement on the recommendation for the setting up of a Commission on Industrial Relations which is to have the status of a Royal Commission; what are to be its terms of reference; and who the Chairman and members of the Commission will be.

The Prime Minister: With permission, Mr. Speaker, I will circulate in the OFFICIAL REPORT the text of the announcement about the setting up of the Commission, the terms of reference and the name of the Chairman which was issued from 10 Downing Street on 17th January.
The names of the other members of the Commission will be announced within the next day or two.

Mr. John Page: In view of the fact that the White Paper states that the new Commission will have no responsibility arising from the prices and incomes criteria when it makes recommendations on any settlements which it proposes to the First Secretary, is the Prime Minister satisfied that there will not be a tussle here—that the First Secretary may find any recommendation from the C.I.R. unacceptable and refer such recommendation to the P.I.B.? If so, who will be the referee in the heavyweight contest between Woodcock and Jones?

Sir Knox Cunningham: The Prime Minister.

The Prime Minister: Mr. Woodcock and Mr. Jones. I recognise the point the hon. Member has in mind. I am satisfied that there will not be a problem here. The hon. Member will be aware that the Prices and Incomes Board is statutory and has statutory duties, and that, indeed, it started its life as a Royal Commission, while awaiting the Statute. I do not think the situation which he fears is likely to arise.

Mr. Bidwell: Will my right hon. Friend not agree that one of the desirable terms of reference of the Commission will be to ensure complete flexibility and deployment of both capital and labour and that, therefore, the weekend speech of

the Leader of Her Majesty's Opposition, relating to the movement of Commonwealth immigrant workers, is completely idiotic in this context?

The Prime Minister: I understand my hon. Friend's feelings in this matter. The Commission on Industrial Relations has no responsibilities in the field described by the hon. Gentleman and therefore, in this context, my hon. Friend's question is irrelevant as the right hon. Gentleman's speech was to the situation he was talking about last Saturday.

Mr. Scott: The Minister appears to be moving quickly in setting up the Commission. Can we have an undertaking that we shall see the Bill on industrial relations in the very near future?

The Prime Minister: We shall certainly produce it with all practicable speed. There are more consultations still to be held. This is, of course, a Bill which, because of its complexity, and because it seeks to legislate in an area in which virtually nothing has been done for the last 60 years, is a difficult one to draft. It is extremely important that the drafting should be right. It will be a difficult one to draft, but we shall produce it as quickly as we possibly can.

Mr. Wyatt: As Mr. George Woodcock, while General Secretary to the Trades Union Congress for nine years, did so little to restructure the trade union movement that the Government now are having to produce legislation to do the job, is it not a great pity that he has been appointed Chairman of the Commission on Industrial Relations, and will the Prime Minister now reconsider this appointment?

The Prime Minister: No. There is certainly no question of reconsidering this appointment because the appointment which has been recommended to Her Majesty is the appointment of the best person for the job. I am sorry that my hon. Friend's study of this matter, no doubt deep and detailed and expert over the years, has led him to the conclusions he has reached. Mr. Woodcock certainly sought to make many reforms in trade union practice and has achieved very many. He can proceed only by democratic agreement by a democratically elected executive. Like many other


questions, this is not quite as simple a matter as my hon. Friend thinks.

Mr. Thorpe: Will the Prime Minister agree that, whatever cave men on either side of the House may think, the sooner people such as Mr. Woodcock are able to produce a report on the rights and obligations of the trade union movement in this country the better for the economy of this country and our economic revival?

The Prime Minister: The right hon. Gentleman is, of course, absolutely right. The Commission has not only got the duty of producing a report—it is not a committee of inquiry in that sense—but it has also the duty to promote improvements in industrial relations, and institutions and procedure in industrial relationships. I think the whole House, whatever other disagreements we may have on the White Paper, will recognise that the positive side of improving industrial relations, apart from other Measures, is absolutely vital and that it is right that the Commission should be permitted to get on right away.

Mr. Wellbeloved: Will my right hon. Friend bear in mind that the House also wishes to be consulted before the presentation of the Bill, and can we be assured of having a debate on the White Paper?

The Prime Minister: My hon. Friend is absolutely right in saying that the House needs to be consulted about this. It is, as I say, not only a question which affects the human relations of the constituents of every one of us; it also deals with a situation which has not been tackled systematically for a period of 60 years.

Mr. Peyton: If Mr. Woodcock is appointed, perhaps the Prime Minister will arrange for as close contact as possible between Mr. Woodcock and the Chairman of the Prices and Incomes Board. Mr. Woodcock will then be able to learn the secrets of activity from Mr. Aubrey Jones, and Mr. Aubrey Jones will be able to learn something about inactivity from Mr. Woodcock.

The Prime Minister: The hon. Gentleman began his question with the words "If Mr. Woodcock is appointed". The recommendation of Mr. Woodcock's name has already been approved by Her

Majesty, so there is no "if" about it. The hon. Gentleman is always entitled on a serious subject to bring out his little jokes.

The following is the information:
The Queen has been pleased to approve that a Commission on Industrial Relations be set up with the following terms of reference:
To examine such matters as may be referred to it from time to time by the Secretary of State for Employment and Productivity concerning the functioning and development of institutions and procedures for the conduct of industrial relations between employers and their representatives on the one hand and employees and their representatives on the other hand; to promote improvements in such institutions, procedures and relations; and to report.
The Queen has also been pleased to approve that The Right Honourable George Woodcock, C.B.E., be appointed Chairman of this Commission

LEADER OF THE OPPOSITION (SPEECH)

Mr. Michael Foot: On a point of order. It frequently occurs at this stage of our proceedings that hon. Members on either side of the House may ask whether a Minister has asked leave from you, Mr. Speaker, to make a statement in reply to a particular Question.
May I ask, according to that precedent, whether you, Mr. Speaker, have had a request from the Leader of the Opposition for him to make a personal statement to the House today on his pitiful surrender to Powellism, a statement which has caused widespread disgust among decent people throughout the country both by its actual nature and by the weasel words with which it has been defended?

Mr. Speaker: Order. The hon. Gentleman must know that I have not had a request from the Leader of the Opposition to make a personal statement.

Mr. Peyton: On a point of order. Have hon. Members no remedy against points of order such as that raised by the hon. Member for Ebbw Vale (Mr. Michael Foot)?

Mr. Faulds: There is always the Chiltern Hundreds.

Hon. Members: You cannot take it.

Mr. Speaker: Order. Hon. Gentlemen must contain themselves.

Mr. Peyton: I was seeking to ask whether hon. Members have no remedy against such a point of order as was raised by the hon. Member for Ebbw Vale, addressed in no way to a matter concerning Ministerial responsibility, but merely seeking to make a wholly unjustified onslaught upon what my right hon. Friend has been endeavouring with honesty and courage to put forward upon a difficult topic.

Mr. Shinwell: Further to that point of order. In view of the attack made by my hon. Friend the Member for Ebbw Vale on the Leader of the Opposition, surely the Leader of the Opposition is entitled to reply.

Mr. Speaker: We have already passed from the realms where a point of order was a real point of order.

Sir Harmar Nicholls: Further to that point of order. As it was quite clear after the fourth sentence spoken by the hon. Member for Ebbw Vale that it was not a point of order, but a low-down political attack, why was he allowed to continue to the end?

Mr. Speaker: Order. Heat does nobody any good. The Chair must be responsible for the acts of the Chair.

Mr. Ridley: Further to that point of order. May we now take it that hon. Members are entitled, under the guise of a point of order asking you, Mr. Speaker, whether you have received an application from any Minister or hon. Member on the other side of the House to make a personal statement, to launch a bitter and unjustified personal attack on another hon. colleague in this House, and that they will not be impeded by any of the rules of order?

Mr. Speaker: I share the opinion expressed by the hon. Gentleman that hon. Members should not use the guise of a point of order to make attacks upon other hon. Members—[Interruption.] Certainly, noise is a point of disorder.

Sir G. Nabarro: On a point of order. In view of the rebuke which you, Mr. Speaker, have administered to the hon. Member for Ebbw Vale (Mr. Michael Foot), should he not be called upon by the Chair to withdraw the wholly unjustified attack upon my right hon. Friend?

Mr. Speaker: Order. For the second time, the House must allow the Chair to act as Chairman of the proceedings.

SCOTLAND (EMPLOYMENT OF TEACHERS)

Mr. Ian MacArthur: Mr. Ian MacArthur (by Private Notice) asked the Secretary of State for Scotland whether he will make a statement in view of the varying decisions on the dismissal of teachers taken by local authorities in Scotland yesterday.

The Secretary of State for Scotland (Mr. William Ross): Education authorities have a duty to comply with the requirements of the Schools (Scotland) Code as regards the employment of teachers.
I regret that some authorities must now be regarded as in default in respect of that duty, and I therefore consider that I have no alternative but to invoke the powers of enforcement available to me under Section 71 of the Education (Scotland) Act, 1962.

Mr. MacArthur: Will the Minister not agree that the situation is one of total confusion? In the interest of children and of education, will he now take a new initiative to encourage those teachers who have not registered to do so, such as announcing that a review of the constitution of the General Teaching Council will definitely be held shortly?

Mr. Ross: I cannot agree with the hon. Gentleman that there is confusion. Following the Act of Parliament passed in 1965, and the Regulations made under it, it is absolutely clear that from 1st April last year it has been the duty of teachers to register. We have given them plenty of time to do so. If there is any confusion it has been caused by a very aggressive minority setting themselves against this regulation.
A review would not change the regulation. This situation would still exist. The hon. Gentleman will appreciate that on 21st January I said that I was prepared to have an earlier review, and that what I wanted was an indication from those mainly concerned that they, too, wanted it. I still stand by that.

Mr. Woodburn: Is my right hon. Friend aware that his statement will give


great satisfaction to the majority of teachers in Scotland, whose representatives told hon. Members this morning how alarmed they were at lest the behaviour of this small minority might create conditions under which this legislation would be frustrated and this reform, which Scottish teachers have secured in advance of any other country, would be destroyed by the foolishness of a few people?

Mr. Ross: My right hon. Friend is correct in saying that this is a desirable reform and one to the great credit of this House and the teaching profession. When one bears in mind that the number of certificated teachers and new entrants who have registered is 49,398, and that the unregistered minority is 776, one can see how regrettable it is that this situation has arisen over such a small minority.

Mr. Edward M. Taylor: In view of the threat of dismissal, does the right hon. Gentleman believe that the small number remaining unregistered is a reliable guide to those who have registered willingly? As the two sides are so close, would the G.T.C. be in favour of a review at an early date which, in my view, might bring an end to a situation which could poison relations in Scottish education for years?

Mr. Ross: What might poison relations in education in Scotland for years is the failure to get unity within the teaching profession and the battle between the unions continuing. As a former teacher, I have set myself the task of trying to get unity, and I thought that it was possible within the G.T.C. I hope that it is still possible. That is why those who have not registered should register, and we should try to create something to the advantage of the teaching profession. I am sure that the House appreciates what the Secretary of State for Scotland has given up in terms of his previous powers, and now fine an instrument this could be.

Miss Herbison: Is my right hon. Friend aware that he will have the backing of the vast majority of hon. Members representing Scottish constituencies, just as we realised, even before the meeting today, that he has the backing of the vast majority of teachers in Scotland?

Is he also aware that this small minority, for whom the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) makes continual representations, has aroused the disgust of many people in Scotland by instigating and leading the demonstrations that were seen in Glasgow and other places yesterday? Those of us who have anything to do with the teaching profession feel that this conduct is quite shocking, since it is due to a squalid inter-union wrangle.

Mr. Ross: I am sure that my right hon. Friend is expressing the feelings of many about the scenes yesterday, where children were led by some pied pipers and, obviously, did not know what it was all about. I have not sought to compete with the vituperative hysteria of some of the disputants. I hope that they will come to their senses quickly, appreciate what all this means for the education of children and the status of the profession, and register.

Mr. Gordon Campbell: While it is to be hoped that the G.T.C. will be strengthened in due course by the full registration of teachers, will the Secretary of State none the less introduce urgently some flexibility to avoid the loss of a number of teachers whose services in Scotland we cannot afford to lose?

Mr. Ross: It is clear from what was said by my hon. Friend in November and from what I said last week that our approach is not inflexible. We have given every indication of our willingness to have this review. We do not want to lose teachers, and I am sure that we all regret that the teachers should have felt it necessary to put themselves into this position.
May I do now what I should have done at the outset, congratulate the hon. Member for Moray and Nairn (Mr. Gordon Campbell) on his occupancy of his new position on the Opposition Front Bench? May he long be spared to occupy it.

Mr. James Hamilton: Will my right hon. Friend assure the House that he will not authorise a review until he extracts from the three main associations an assurance that they will advise their members to register, and will not pander to an unofficial organisation?

Mr. Ross: I do not want to make any review conditional and as inflexible as


that. However, I hope that it will be appreciated that there cannot be a review of the G.T.C. until we are sure that there is a G.T.C.

Mr. David Steel: Will the Secretary of State accept that the dismissal of this minority cannot do anyone any good, and that there is some evidence that even the majority of teachers who have registered are not entirely happy with the constitution of the G.T.C? In those circumstances, when he talks about an early review, will he undertake to authorise a review before the end of the first year of operation of the G.T.C, which is in April of this year? I understand that that will influence a lot of unregistered teachers to register.

Mr. Ross: I do not want to commit myself to a date. I have said already that I want an early review, and, by that, I do not mean next year. We all regret the position of the teachers, and hope that they will appreciate the importance of this to their own profession and to the children.
The hon. Gentleman suggested that the majority of teachers who have registered have some criticisms. That is true of any organisation. No organisation is perfect. I hope that we shall make improvements as we go on. However, improvements can only be made once the organisation is stabilised, and that is what we must do.

Mr. Lawson: Is my right hon. Friend aware that, basically, this is an inter-union dispute, and that a very small union has been blatantly dishonest in attacking the General Teaching Council and my right hon. Friend? I hope that he will not give way to this small minority, but will see that he moves in step with the large majority of teachers who support the G.T.C.

Mr. Ross: I am not concerned about attacks on myself. I am used to them. What I have been concerned to do as Secretary of State—and, in this, I have had the support of all parties until recently—is what we thought best and what we thought the teaching profession wanted. I still think that it is what the majority of teachers want.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. Mr. Bessell.

BILL PRESENTED

TRANSPORT ACT 1968 (AMENDMENT)

Bill to amend the Transport Act 1968 so as to prohibit the Railways Board from imposing selective surcharges or selective additional charges on rail passenger service fares, presented by Mr. Peter Bessell; supported by Dame Joan Vickers, Mr. John Pardoe, and Mr. Eric Lubbock; read the First time; to be read a Second time upon Friday, 2nd May, and to be printed. [Bill 70.]

EARNINGS-RELATED SOCIAL SECURITY (WHITE PAPER)

Mr. Iain Macleod: On a point of order, Mr. Speaker. May I raise a point of order on which perhaps the Leader of the House can help us? I have in my hand, and there is available in the Vote Office, the Government White Paper, "Proposals for earnings related social security". Clearly, this is a document of the highest importance in which all hon. Members are interested.
My point of order is that it has been given to the Press, and, quite properly, will be discussed by hon. Members tonight on all channels of television and radio. However, as the White Paper says, it is presented to Parliament. In my view, therefore, there should have been at least a statement by the Secretary of State presenting it to Parliament. In this way, Parliament should be recognised as the first forum to discuss it, and not the last forum after everyone else has had a chance to discuss it.
I would be grateful to know whether the Secretary of State has asked permission to make a statement on this matter, and whether the Leader of the House will take into consideration the point that I have made to him today.

Mr. Speaker: Order. I have had no such request from the Secretary of State. The matter itself is one for the Leader of the House. Perhaps he can say something about it.

The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): I will note the point which has been made, although I would say to the right hon. Gentleman that White Papers have been issued previously without a statement first being made to the House. However, I understand his feeling. I believe that the White Paper should be debated as quickly as possible, but that is a matter entirely for the Minister concerned.

Sir Harmar Nicholls: Further to that point of order. I understand that the Minister for Social Services is himself appearing on television tonight to comment on the White Paper. I feel that he ought to have appeared at the Dispatch Box before going on television. Can the Leader of the House confirm that

the right hon. Gentleman is appearing on television tonight?

Mr. Manuel: Further to that point of order. Many White Papers have been presented by the Opposition as well as by the Government on various legislative matters that were to come before the House without them having been introduced at the Dispatch Box. Nevertheless, would my right hon. Friend make certain that we have ample opportunity to debate the White Paper before legislation is drafted?

Mr. Peart: It may help the House if I comment further on this point. I have no authority to intervene when a Minister or any other hon. Member decides to appear on television or radio. As my hon. Friend has pointed out, there is no rigid rule here. I agree that it is sometimes for the convenience of the House that a Minister should appear before the House, but it is for the Minister to decide.

Mr. Heath: Further to the point of order. The Leader of the House has a duty to the House. He knows full well that if the Secretary of State goes on television and radio tonight he will be asked questions. Should not this House have had the first opportunity, on what is a major White Paper, to question the right hon. Gentleman? There are, of course, White Papers presented without statements first being made in the House, but this is a major White Paper on an issue of major policy and the Minister has not given hon. Members an opportunity to question him first.
Is not this lowering the position of Parliament? Should not the Secretary of State have appeared here to make a statement and give the House an opportunity to ask him questions before appearing on television and radio?

Mr. Peart: Like the right hon. Member for Enfield, West (Mr. Iain Macleod), the Leader of the Opposition has raised a point of order and I have said that I will convey it to my right hon. Friend, who has not made a statement today. There will be a full debate on the White Paper. I remind the House that it deals with a very highly technical subject. Hon. Members might care to examine the White Paper. I shall certainly convey the views of right hon. and hon. Gentlemen opposite to my right hon. Friend.

Mr. Paget: Has not a misunderstanding occurred? It is the Minister's duty to inform the House, and he has done this. On this occasion he has done it through a White Paper, which he expects us to read. He informs the public, whom he does not expect to read a White Paper, through the medium of television. In the case of a complicated White Paper such as this, he leaves hon. Members an opportunity to read it so that they do not put a lot of questions to him before having read it. We could not have read it before Question Time and, therefore, had we asked a lot of questions about the matter now we would have made a nonsense of the whole thing.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I hope that hon. Members will not attempt to debate a point of order.

Sir A. V. Harvey: Is the Leader of the House aware that in the case of a White Paper such as this it is the desire of hon. Members that the Minister should amplify it before the House? As it is too late for the Secretary of State to do that—[HON. MEMBERS: Why?]—unless special arrangements can be made for him to be here quickly, surely the Minister should invite one of my right hon. Friends to appear on television with him tonight and share the programme?

Mr. John Hynd: Am I wrong in recollecting that the Minister announced to the House yesterday or one day last week that the White Paper would be available today and that he therefore made a statement? Did not hon Gentlemen Opposite suggest then that we should have a debate?

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. We must get on.

ARCHITECTS REGISTRATION (AMENDMENT)

3.54 p.m.

Mr. Arnold Shaw: I beg to move,
That leave be given to bring in a Bill to amend section 14 of the Architects Registration Act, 1931; to vary from time to time the proportion of the income of the Architects Registration Council of the United Kingdom which has to be put into the fund maintained by the Council for the support of needy students of architecture; to widen the purposes of the fund; and for purposes connected therewith.
Section 14 as amended by the Architects Registration Act, 1934, reads:
At least half of the total amount of the fees received in each calendar year after the year 1934 by the Council under this Act shall be devoted, in such manner and on such conditions as the Council may determine, to the provision of scholarships and maintenance grants for the assistance of students in architecture whose means appear to the Council to be insufficient to enable them to pursue their studies.
This the Council has faithfully continued to operate, basing the criteria of need on those laid down from time to time by the Department of Education and Science. However, since the operation of the Education Act, 1944, such students who were likely to benefit from Section 14 are now almost entirely covered by state and municipal scholarships. In spite of the Council's liberal interpretation of the terms of Section 14, the scholarship fund, restricted, as it is, in its use, has continued to build up a very substantial reserve.
Another result of the obligation imposed by the Section has been the growing imbalance between the scholarship fund and the general fund which is used to meet other expenses of the Council. This in turn has produced an anomaly adversely affecting all architects on the Register. For example, the Council found it necessary to increase the annual retention fee as from 1st January, 1967. But for the legal requirement imposed by Section 14, directing at least half the fees to the scholarship fund, the increase could have been limited to between 10s. and £1. As it was, the fee was doubled; from 30s. to £3.
Under the terms of the 1931 Act, it was necessary to obtain the approval of the Privy Council for such an increase,


and on this occasion the imbalance and anomaly was perceived by that body, which urged that steps be taken to remedy the situation. This, of course, can only be done by legislation. Hence the Bill.
The purposes of the Measure are, broadly, twofold: first, to change the fixity of one half to be devoted for the provision of grants to needy students to a proportion determined from time to time by the Council and approved by the Privy Council; and, secondly, to widen the scope within which these grants may be made.
This extended scope will enable the Council to make grants not only to needy students, but also to sponsor and support architectural education and research into architecture and the arts and sciences connected therewith. This will extend the field to such persons as sociologists, building economists and other specialists in the whole art and science of building.
My proposed Bill is completely non-contentious and has no political significance. It is supported by the Royal Institute of British Architects, the Architects' Registration Council, the Privy Council and hon. Members on both sides of the House. I therefore commend it to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Arnold Shaw, Mr. Chichester-Clark, Mr. Hilton, Mr. Lubbock, Mr. Wellbeloved, and Mr. R. C. Mitchell.

ARCHITECTS REGISTRATION (AMENDMENT)

Bill to amend Section 14 of the Architects Registration Act 1931; to vary from time to time the proportion of the income of the Architects Registration Council of the United Kingdom which has to be put into the fund maintained by the Council for the support of needy students of architecture; to widen the purposes of the fund; and for purposes connected therewith, presented accordingly, and read the First time; to be read a Second time upon Friday, 28th February and to be printed. [Bill 72.]

Orders of the Day — PENSIONS (INCREASE) BILL

Order for Second Reading read.

3.59 p.m.

The Paymaster-General (Mrs. Judith Hart): I beg to move, That the Bill be now read a Second time.
This is an important Measure for many people. It will bring help to over 656,000 public service pensioners, to whom must be added almost 130,000 pensioners of the Armed Forces of the Crown, who will receive corresponding increases by Instruments issued under the Royal Prerogative. It covers those who have retired from the Civil Service, the National Health Service, teaching, local government, the police service, the fire service and a number of numerically smaller categories such as the judiciary and colonial governors. All have pensions governed by Statute which are paid either by Government Departments or by local authorities and local authority superannuation funds.

Mr. R. T. Paget: On a point of order. The Minister has said that pensioners of the Armed Forces, although governed by warrant, have their pensions controlled by the Bill. That being so, will it be in order to discuss their position on this Bill which, in effect, controls their pensions indirectly, if not directly, as my right hon. Friend has said?

Mr. Speaker: This is an old difficulty. Every time we have a Bill on public service pensions hon. Members wish to discuss the pensions of some groups of pensioners outwith its scope. The types of pension covered by this Bill are laid down in the Schedules at the end of it and in previous public service pensions Acts. On occasions such as this, hon. Members have sought to raise the question of the pensions of ex-Servicemen, railway superannuitants and pensioners from the nationalised industries.
I have looked at all the Rulings—I suffered from some of them myself when I was a back bencher. I chose the most generous I could find. On 23rd


February, 1956, Mr. Deputy Speaker Sir Rhys Hopkin Morris ruled:
The hon. Member is in order in referring to this matter, but I do not think he would be in order in carrying it too far."—[OFFICIAL REPORT, 23rd February, 1956; Vol. 549, c. 658.]
Therefore, incidental references may be made to pensioners not covered by this Bill; but they must be incidental.

Mr. Paget: I am most grateful to you, Mr. Speaker, for your Ruling. Would it be in order to ask the Government whether they can assure us that an opportunity will be given to deal with the situation of Service pensioners so that we can refer to their difficulties in detail rather than incidentally?

Mr. Speaker: Their pensions are dealt with under a Royal Warrant, but I believe that from time to time opportunities for such debates have been provided. It is a matter for the Minister.

Mrs. Hart: I recognise the concern of my hon. and learned Friend the Member for Northampton (Mr. Paget) to discuss Service pensioners other than incidentally. It is a matter for the Leader of the House. I will ensure that my right hon. Friend is told of my hon. and learned Friend's desire to have an opportunity to discuss the matter.

Mr. Paget: I am most grateful.

Mrs. Hart: I was covering the groups of people who are directly affected by the Bill. I should add that it also covers the pensions of certain former civil servants in India, Pakistan and Burma and their dependants.
The Bill also makes provision for supplementing the pensions of former members of the overseas services, the Sudan Civil Service and the Egyptian Government Service, and their widows and dependants. Indirectly, it may bring help to many others who receive pensions from other bodies in the public sector which have in the past followed the lead set by the Pensions (Increase) Acts.
It is, of course, a costly Measure. Taking into account the associated increases in Armed Forces pensions, it will cost £34 million. Of this sum, £27 million will fall on the Consolidated Fund, and £7 million will be met by local authorities as rate-borne expenditure. We are spending more on this occasion than

in 1965, when the equivalent Act cost £25 million, again including the corresponding increases in Armed Forces pensions. That we have accepted a new commitment of this magnitude at a time when it is more than ever essential to keep expenditure under strict control is a measure of our concern for the welfare of those who will benefit from the Bill, which of course the whole House shares with us.
On timing, I am aware that there has been some disappointment that we have not found it possible to introduce the new increases with effect from 1st January. But the House will wish to know the intervals of time between previous increases in order to make a fair judgment on this point. In fact, the intervals between the operative dates of successive Acts have been as follows:

1947 Act and 1952 Act—5 years 10 months;

1952 Act and 1956 Act—3 years 6 months;

1956 Act and 1959 Act—3 years 4 months;

1959 Act and 1962 Act—3 years 5 months;

1962 Act and 1965 Act—3 years exactly.

Therefore the 1965 Act was the only substantial Measure since the war to take effect within three years and three months of its predecessor.

Mr. Eric Lubbock: It is no good looking at the periods which elapse between successive Acts unless one takes account of the change in the cost of living in those periods. Would the right hon. Lady give the amounts by which the cost of living increased from, say, 1959? The reason for such a short period elapsing between the 1962 and 1965 Acts was the enormous increase of 11 per cent. in the cost of living.

Mrs. Hart: The hon. Gentleman has interrupted me a shade early. I am about to give all the figures, which I am sure he will be happy to have.
Had we been free from financial constraint, we should have been glad to bring the Bill forward a little earlier. But there has never been a time when ample resources were available to satisfy all the competing claims for public money, and in determining the timing of


the Bill we have had to resolve a genuinely difficult problem of social priorities.
On the one hand, we have been anxious to bring forward a really worthwhile Measure to help public service pensioners, towards whom the Government have special responsibilities and on many of whom we are well aware that the increase in the cost of living over the past three years has borne heavily. On the other hand, we have had to weigh their claims against others of high importance from many other quarters which hon. Members from both sides of the House urge upon us. I am satisfied that we could not responsibly propose an effective date earlier than 1st April.
I should say a few words about those not affected by the Bill before going on to more detailed points. Like its predecessors, the Bill does not affect retired employees of nationalised industries and other public service bodies. They do not need to be empowered in this way to provide increases in pensions already in payment.
There is on both sides of the House very deep concern about some of the former employees of the nationalised industries. Railway superannuitants are a particular example. I should, therefore, emphasise that the nationalised industries have the power, without a Bill of this kind, to make whatever increases they feel they can make in the pensions which they pay to their former employees. But no doubt—and this has happened before—they will consider what action it would be right for them to take in the light of the Bill and of the level now provided for the public service pensioners who are covered by the Bill.

Mr. Arthur Palmer: My right hon. Friend will appreciate that the nationalised industries' schemes are invariably statutory, and that Ministerial approval is required before changes can be made. Therefore, they come under Government control just the same.

Mrs. Hart: They come under a degree of Government control in that Ministerial approval is needed for proposals they put forward. However, they have power to put forward whatever improvements in their schemes they wish to put forward, and are not inhibited in

doing so by a lack of legislative power. That is the essential point. The main provisions of the Bill are set out in Clause 1 and Part IV of Schedule 1. We have given most careful consideration to the best way of allocating the money provided under the Bill. The 1959 Act introduced the graduated scale of increases, varying according to the date of the pension. It was followed with variations in 1962 and 1965 Acts, and it has helped to bring the old pensions into a closer relationship with those awarded more recently.
The extent to which this levelling up process has gone varies in different parts of the public services, but in general it is still true to say that those most recently retired are most favourably placed. While there is not an even pattern over the whole area and, in particular, some of the oldest and smallest pensions have already been brought close to current standards, many of those who have been retired longest are still the furthest behind. And, of course, as they are among the most elderly, they are the least able to help themselves. Some, the oldest among them, have no National Insurance pension to reinforce their occupational pensions.
It is, therefore, not surprising that the strongest public sympathy, both inside and outside of the House, continues to be expressed for these pensioners. It is noteworthy, too, that that is the view of the pensioners themselves. My attention has been drawn by the Public Services Pensioners Council to a resolution adopted at a mass meeting of the council held in London just before Christmas, drawing special attention to the position of the pensions of longest standing.
Against that background, we have thought it right again to provide the maximum assistance to those who have been longest retired. It will be seen from Part IV of Schedule 1 that we propose that all pensions dating from 1st July, 1955, and earlier, shall be increased by 18 per cent. An increase of this size offers a substantial improvement, which I believe will be widely welcomed, certainly by those directly affected. It compares with a maximum increase of 16 per cent. provided under the 1965 Act and with 12 per cent. plus a flat-rate sum of £20 for the over-seventies provided by the 1962 Act.
It should also be compared—and here I come to the point that the hon. Gentle-main raised—with the increase of 12·3 per cent. in the Index of Retail Prices since the 1965 Act came into operation on 1st January, 1966. I can, of course, provide the earlier figures, but perhaps it will be convenient if they are provided later. This means that these people will not merely have the purchasing power of their pensions restored to the point it had reached immediately after the passage of the last Act; they will enjoy a further significant improvement in real terms in the value of their pensions.

Mr. Patrick Jenkin: Will the right hon. Lady confirm that the 12·3 per cent. figure takes the cost of living up to December, 1968, whereas the Bill is not to begin until 1st April, 1969, and, therefore, perhaps another 1½ per cent. is likely to be appropriate?

Mrs. Hart: Mrs. Hart It takes account of the most recent figures published about the cost-of-living index. It cannot take account of unknown figures between now and April. On the other hand, it is inevitable that the House considers a Bill a little in advance of the actual date of payment, or the date of payment would never arise. Therefore, we can only take account of what we know to be the facts at the point at which we present the Bill.

Mr. Lubbock: I am grateful to the right hon. Lady for dealing with my point. However, does she not think that if the increase since the last Act has been 12·3 per cent. we are justified in assuming that it will continue at the same rate over the next three months until the Bill comes into force and that, therefore, we should take a figure of 13·7 per cent., not 12·3 per cent., which we have already experienced up to December?

Mrs. Hart: If the hon. Gentleman looks at the monthly cost-of-living-index in the period since November 1967, he will find that a straight line cannot be drawn on the graph to represent increases in the index. There have been fluctuations. Indeed, as we have grown further away from devaluation, we have found that price increases have become of lesser proportions. So we cannot predict, on the basis of past figures, what precisely

will happen in the next three months.
In any case, in giving an 18 per cent. increase for public service pensioners who retired longest ago and are, therefore, in greatest need of help, we are comparing that with the 12·3 per cent. increase since the 1965 Act and, for whatever is likely or is thought to be the increase in the cost of living between now and 1st April, we are still allowing a very ample margin.
I have said that people will have had an improvement in real terms in the value of their pensions. It is certainly the case that the margin is sufficient to ensure that, even if the increase in real terms is not to be represented by the total difference between 12·3 per cent. and 18 per cent. I think that this is quite clear.
Indeed, since the party opposite increased pensions with effect from 1st January, 1963, all those who retired before 1st July, 1955, will, under this Government's two Measures, have had an increase of 10 per cent. in the real value of their pensions, on top of getting full compensation for the increase in the cost of living. It is important to realise that, since 1963, there has been a 10 per cent. real increase on top of the increases in the cost of living. In this Bill, therefore, we are making an important advance in the living standards of our oldest public service pensioners, which the House will welcome.
For the more recent pensions, the size of the increase falls by 1 per cent. a year until we reach those beginning during the year ending 1st July, 1963. Thereafter, the increase falls by 2 per cent. annually, and the most recent pensions to receive any increase will date from 1st July, 1967. In this way, we do, I hope, concentrate the greatest measure of assistance on those who need it most.
A few examples will illustrate the effect of the new increases. A clerical officer who retired from the Civil Service in December, 1954, after 40 years' service, would then have received a pension of £284 a year. This has been increased under the existing Acts to £414 and is further increased under the Bill to £489. The increases total 72 per cent.—and here is a further figure for which the hon. Member for Orpington (Mr. Lubbock) asked—compared with an increase in the Index of Retail Prices,


taking it a year further back than the date for which the hon. Gentleman asked, since December, 1954, of 59 per cent. It is 72 per cent. as against 59 per cent.
A higher executive officer, retiring on the same date with a pension of £490 a year, now has £698, and this is further increased under the Bill to £824, a total increase of 68 per cent.
In another sphere—and this is my last example—a constable retiring from the police force in December, 1958, after 30 years' service, with a pension of £440 a year, is now receiving £534. This goes up under the Bill to £609, a total increase of 38 per cent. compared with a 37 per cent. increase in the prices index since his retirement.
I should like to give a fuller account of the policy underlying the Bill, but before I do so it may be convenient if I give a brief account of its other main provisions.

Mr. James Scott-Hopkins: Will the right hon. Lady confirm that the same principle of giving a greater increase to the older pensioners will apply to the Armed Services pensioners under Royal Warrant at a later date?

Mrs. Hart: I am sure that the hon. Gentleman would like a specific reply, so perhaps the Parliamentary Secretary to the Ministry of Overseas Development can give it at a later stage in the debate.
Certain provisions supplementary to Clause 1 are in paragraphs 1 to 4 of Schedule 2. These contain detailed provisions on the method of calculating the new increases and prescribe the conditions of eligibility for them by reference to the pensioner's age, for example. They raise no new points of principle.

Clause 2 makes some minor amendments to the 1962 and 1965 Acts, perhaps the most important of which is the removal of the exclusion from pensions supplements under regulations made by the Minister of Overseas Development of former overseas service officers who, on retiring, remained resident in the territory in which they were serving. Before 1965 they could qualify for supplements only if they were living in the United Kingdom. The 1965 Act extended eligibility to those resident in a third country, and we believe that the time

has now come to remove this residential qualification altogether.

Clauses 3, 4 and 5 deal with expenses, interpretation and citation, and do not call for special comment at this stage. Parts I, II and III of Schedule 1 list the classes of pensions qualifying for increases. They contain no major changes in the scope of the 1965 Act.

I want to devote a few moments to the question of parity. Many pensioners would like to see us apply the principle of parity; that is, to bring up all pensions to the level of those now coming into payment for the first time for the same record of service. This approach has an obvious appeal, but its practical difficulties should not be under-estimated, particularly at a time when traditional grading structures are under examination, and it may become quite impossible to say with any certainty 10 or 20 years after a man has retired what would be the current rate of pay for his grade which, it may be, has disappeared years earlier. This is one of the real problems.

Moreover, parity would be very expensive; figures were given yesterday, in reply to Questions. Parity would cost not £34 million, but over £100 million a year, and we could not possibly justify additional expenditure of that order at present, the more so since it would mean going further on public service pensions than we have felt it right to commit ourselves to for the earnings-related pensions to be provided under our new State scheme. It would also represent far more generous treatment than the vast majority of members of private occupational pension schemes can hope to enjoy.

In short, it would mean placing public service pensioners in a highly privileged position in relation to the rest of the community, and to do that would not be to keep a proper balance between the conflicting interests of the pensioner himself, the taxpayer and the ratepayer.

I do not think that this conclusion will be seriously disputed—whatever their sympathies may be—by right hon. and hon. Members opposite. I was interested to see that, speaking in the debate on public service and Armed Forces pensions on 9th May last year, the right hon. Member for Barnet (Mr. Maudling) said:
… we are not arguing for parity. We accept that the arguments against parity are


very strong."—[OFFICIAL REPORT, 9th May, 1968; Vol. 764, col. 646.]

As a variant on the claim for full parity, we are sometimes urged to introduce parity to a date in the past. The years 1956 and 1960 have been mentioned. As a first step towards full parity this approach might have something to commend it, but I cannot see that it has much virtue in isolation, and apart from a planned movement by stages to full parity. Either a date must be chosen which still leaves all those brought up to it well behind current rates, in which case it would at best give only a limited satisfaction, or else the difficulties of full parity are again involved.

It is open to a further serious objection. The combined effect of previous Pensions (Increase) Acts has been to do most for the oldest and smallest pensions. Nobody will want to argue that that was wrong in principle. It was the sense of general agreement in the House that those are the people who most need help. But to proceed on the basis of partial parity would reverse this bias, since the larger of the old pensions would receive increases that were larger not merely in absolute terms but also proportionately larger than those falling due on the smaller pensions.

For example, to bring the current level of pension payable to a postman who retired with 40 years' service in 1948—a long time ago; a small pension—up to the current level of a similar pension dating from 1956 would mean an increase of £12 a year, or 4 per cent. The comparable figures for an Assistant Secretary are £229 a year, or 17 per cent.

All this indicates that it is easier to criticise the present system of increasing pensions than to devise any simple alternative that is fair both as to various groups of public service pensioners, to all these pensioners as a whole, and to the community at large. It is for this reason that the general shape of the Bill is along well-established and orthodox lines.

I know that it is felt in many quarters of the House that public service pensioners should not have to rely on a series of Bills of this nature to protect their standard of living, and that some automatic system of adjustment should be introduced The present system has

brought substantial improvements to many public service pensioners, but it is still far from perfect.

Any new system will now fall to be considered in the light of our proposals for the new State earnings-related pension scheme, which were published a few minutes ago. Hon. Members have not had a chance to read the White Paper yet, but there are parts which have a very close bearing on the subject that we are discussing today. Over 90 per cent. of all public service pensioners either already receive a National Insurance pension or will do so when they reach the appropriate age. We can now consider public service pensions, which are occupational pensions of a particular kind, and the pensioner's total position under the new scheme. Now that our long-term proposals in the national field have been formulated and presented we intend to see what better arrangements we can devise for the future.

I can tell hon. Members who have not had a chance to read this part of it that the White Paper outlines a pattern of partial contracting out for occupational schemes, and indicates that in relation to particular schemes in which the Government have a special rôle as employer, we intend
that these matters should be discussed fully with staff interests. In the Civil Service, following the recommendations on various pensions questions by the Committee under the chairmanship of Lord Fulton, a joint committee has already been set up to review the whole basis of superannuation, with representatives of management and staff, including the industrial trade unions concerned. The implications of the new State scheme will be taken fully into account in the course of this review. The position of the Armed Forces will also have to be considered.

In parallel with this review we shall see what better arrangements we can make when we increase public service pensions in future.

I hope that the Bill will reach the Statute Book well before 1st April, from which we intend that the increases should take effect. If it does, we aim to get increases into the hands of the pensioners as quickly as possible thereafter.

Because this is of great interest I shall say briefly what is likely to happen. Pensions paid by my office—if I may wear both a Civil Service Department and a Paymaster-General's hat for a moment—include those of teachers, the National


Health Service and most, but not all, civil servants. Payments are "staggered" over a monthly or quarterly cycle and, given a commencing date for the Bill of 1st April, my office plans to pay increases for these services on the pensioner's first normal pay date after 5th April. This first payment will include any increase due from 1st April.

In some more complex cases—mainly pensions revised after re-employed service—final assessment of the new pension rate will need more time, but those concerned will receive the straightforward percentage increases under the timetable I have given, and any further improvement, including any arrears from 1st April, as soon as possible afterwards. Though I cannot speak for other pension-paying authorities, I am sure that all concerned will aim to put the increases into payment as soon as possible.

I have attempted to describe briefly the contents of the Bill, its background and the considerations that have led us to introduce it in this form. I suppose that it would be over-optimistic to hope that it will prove to be wholly devoid of controversy, but I believe that it will commend itself to the House as a Measure which fulfills three main objectives.

First, it brings a substantial measure of assistance to public service pensioners; secondly, it concentrates that assistance where it is most urgently needed; and, thirdly, given the inevitable limitations within which we are bound to operate, it strikes a just balance between the responsibilities of the Government as an employer and our wider responsibilities to the community at large.

We can all be assured that the Bill will bring real help to a substantial number of people who have given splendid service to the community and of whose needs we must be continually aware.

4.30 p.m.

Mr. Patrick Jenkin: The Paymaster-General is fortunate in that the first Bill which she brings before the House in her new office and with her new responsibilities for the Civil Service Department is one to which, whatever its shortcomings—and they are many—the House will want to give a general welcome.
Inevitably, of course, our debate will be overshadowed in the Press tomorrow and for some weeks by the comments which will flow from the Government's new White Paper, to which the right hon. Lady referred, but that should not detract at all from the significance of this debate as it affects the subject covered by the Bill. I know that the beneficiaries of the various pensions schemes which the Bill seeks to amend will be following our debate with great care.
Traditionally, Pensions (Increase) Bills have been treated by the House largely as non-partisan. We are all conscious that we share a common responsibility to those who have, in one capacity or another, served the country, a responsibility which we have as employer, which is separate and distinct from any responsibility which the House and the Government may have in any other capacity. Not only do we want to ensure that justice is done to individual State employees: we also want to set an example of good employment practices for the country. These attitudes are shared on both sides of the House.
Although it would be unrealistic and undesirable to seek throughout to maintain a wholly bipartisan approach, I believe that many hon. Members feel an instinctive repugnance at any suggestion that we should engage in an auction for the votes of those who are or might expect to become public service pensioners. But we are entitled to criticise, and it is the duty of an Opposition to criticise, when the Government's performance of their responsibilities falls short either of their promises or of the reasonable expectations of those who have retired from the public service. Where we consider that the Government's policy is inadequate, we are entitled, fairly and within the limitations which I have described, to put forward our own proposals. It is in that spirit that I approach the Bill and the right hon. Lady's speech.
To begin with a general point. The right hon. Lady said that it was a matter of disappointment that the beginning of the payment of the increased pensions was to be postponed until April instead of taking place in January. I thought that she was going to say that it was a matter of disappointment that once again this Bill is little more than another interim Measure, another temporary holding operation. This seems to be a matter


of much greater significance than the possible delay of three months.
The right hon. Lady will perhaps have been reminded that the 1965 Pensions (Increase) Bill was introduced by the Chief Secretary almost with a note of apology, when he said:
I know that many hon. Members feel, and have stressed in earlier debates, that the sort of Pensions (Increase) Bill which we have seen in recent years is not a satisfactory solution to the long-term problem. This Bill, however, is essentially a holding Measure awaiting the outcome of the fundamental review of social security … I hope that the House will accept it as such, within its limited terms of reference, until the Government can introduce the positive new policies on which they are now working.
Earlier, the right hon. Gentleman had referred, as another reason for not being too distressed that this was only a holding operation, to the prices and incomes policy. He said:
Many Governments have paid lip-service to the fight against inflation, but the efforts of my right hon. Friend"—
he was referring to the right hon. Member for Belper (Mr. George Brown)—
give us a real new chance to achieve price stability—and success will bring incalculable benefits to everyone in this country; above all to pensioners and others living on small fixed incomes."—[OFFICIAL REPORT, 18th November, 1965; Vol. 720, c. 1353–4, 1353.]
That false prophecy makes very wry reading three years and three Prices and Incomes Acts later.
Now, on the very day of the publication of the great new review—as my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) called it in a point of order, by any standards a White Paper of outstanding importance—we are debating yet another temporary expedient. This, again, is a Bill which contains no attempt to establish a coherent body of principle for public service pensioners generally, no attempt to deal with the basic flaws in the existing unsatisfactory system, no attempt to solve the real nub of the hardship problem, the pre-1956 pensioners, many of whom are now very old and many of whom are excluded from the existing National Insurance benefits, no attempt to establish new machinery for an automatic review to end the need for the persistent lobbying of hon. Members which I know many of those who feel impelled to engage in it find deeply repugnant and humiliating—

in short, no attempt to do anything but produce a second temporary, stop-gap Measure of the sort which right hon. and hon. Members opposite never tired of criticising us for when we were in power—

Mrs. Hart: I am not clear about something and perhaps the hon. Gentleman can help me. Is he suggesting that the kind of review which will now take place after the publication of the White Paper should have taken place earlier? Is he suggesting that the review is such a simple matter that it could be accomplished in weeks, or that the Government should not engage in very deep and full consultations with Civil Service staffs before making a radical revision of Civil Service superannuation schemes?

Mr. Jenkin: I am sorry that I have stung the right hon. Lady to her feet so early in my speech. Anyone who read the passages in the speech of the Chief Secretary to which I referred—and there are other passages in the debates at that time—had every right to believe that, in the Government's view, that was the last Pensions (Increase) Bill which we would see on the present pattern. When the right hon. Lady talks of a matter of weeks, she is demeaning herself. The Government have had four years to do what they were continually telling us to do when they were in opposition.
We were chided in 1965 by Government spokesmen for expecting them to fulfil their promises in one year. Surely, over four years after they took office, we might expect that they should have done something more about it. Public service pensioners—I will come to the White Paper in a moment—have every right to believe that they have been let down and that their expectations have been dashed.
I was very interested in the right hon. Lady's explanation of the pattern of increases. I find the pattern set out in the Bill—this is the first Bill of this-kind with which I have dealt—very puzzling. The last increases took effect, under the 1965 Act, on 1st January, 1966. Since then, the cost of living has increased by 12·3 per cent. to the end of December and is likely to be at any rate over 13 per cent., though the hon. Member for Orpington (Mr. Lubbock) suggested 13·7 per cent., by 1st April,


when the payments will be made under the Bill. Yet instead of the all-round increase to meet that rise in the cost of living since the last increase, we have a repetition of the pattern of graded increases, which is set out in paragraph 4 of the First Schedule.
The right hon. Lady referred to the pre-1956 pensioners. They are getting the biggest increase, 18 per cent., but they still lag miles behind the rising cost of living, which has taken place since those pensions were first granted. While the 18 per cent. is greater than the 12·3 per cent. or 13·7 per cent., it still leaves them a long way behind. Although the percentage increase is larger than the other categories, the actual increase may well be smaller, because one is applying the percentage increase to a very much smaller sum. Far from narrowing the difference between a very old-established pensioner, retired from, say, the Armed Forces, on the 1919 code, and someone who retired in 1950, the difference may be widened.
Looking at the other end of the table, people who have retired since 1st January, 1966, might reasonably expect the cost of living increase to be somewhat smaller than the 12·3 per cent. If one looks at the Bill one realises that it is not only somewhat smaller; it is but a tiny fraction of the diminution in the value of their pensions since they retired. The only people who appear to be getting an increase which will compensate them for the increases in the cost of living in the last three years will be those who retired between July, 1958 and July, 1959.
Everyone who retired since July, 1959 is not being compensated for the increase in the cost of living since the last Pensions (Increase) Bill. Although the right hon. Lady did not say much about this, many of these people have the National Insurance pension and that has been increased twice. The Government have previously argued that if one is relating one's argument to the cost of living, then the National Insurance pension must be taken into account. I do not dissent from that. Even then, look what has happened to some of the recent pensioners.
Take a single pensioner who retired on 1st January, 1966. He had no increase under the earlier Act; this is his first increase. His £4 National Insurance pension has gone up by 10s.—a 12½ per cent. increase which is within one-tenth of a point of the rise in the cost of living since then, but his public service pension under the Bill only goes up 4 per cent., less than a third of the increase in the cost of living. This is by no means an isolated case, and it shows clearly that, even to take account of the National Insurance pension, there are still substantial numbers of pensioners who are not being compensated for the rise in the cost of living since the last Pensions (Increase) Act.
The whole point here is that the 1956 Act represented a turning point in this whole pattern of pension increases, when we abandoned the concept of absolute hardship as the justification for increases, and substituted the concept of relative hardship. We then, as it were, established the principle of what has come to be known as "the escalator". Broadly, and I use the word in its very widest sense, since then pensions have kept in line with the cost of living. Yet under this Bill those who retired between 1956–58 appear to be getting a bigger rise than the cost of living since the last Pensions (Increase) Act, while those who retired more recently are getting less. For those who retired before the 1956 Act, and who, therefore, did not have the advantage of being brought up to that level, although their percentage increase may be larger, their absolute increase, in many cases, will be very much smaller than those of those who retired later.
This appears to be a bizarre and irrational basis. The table in Schedule 1 looks, on the face of it neat, logical and rational. As it works out in practice it seems to be irrational, haphazard and unfair. Those on the lowest pensions get the largest percentage increases, but the smallest in absolute terms. Some others have broadly kept pace with the cost of living; those who retired too late to benefit from the 1965 Act seem to be left very far behind. Their pensions have fallen a long way behind the cost of living.

Mr. Stan Newens: Is the hon. Gentleman saying that the Opposition would favour a much more generous


increase than has been agreed here? I presume that he would not suggest that those who have been retired longest should get less so that those who retired more recently should get more? In those circumstances, would he be prepared to commit the Opposition to a considerably greater increase in public expenditure than is entailed by the Bill?

Mr. Jenkin: If the hon. Member would care to wait he will see what I intend to commit the Opposition to. For the benefit of anyone who wants to know, I will not commit the Opposition to anything to which we have not been fully and openly committed already.
The system which I have described as bizzare and irrational has already given rise to dismay. I have a letter which has been passed on to me from my right hon. Friend the Member for Barnet (Mr. Maudling), written to him by a National Health Service employee who retired in October, 1964. He did not benefit from the 1965 Act, because that was only for pensions payable before April, 1954. He is now getting a rise of only 6 per cent., and yet the cost of living increase since his pension started is about 20 per cent. With National Health Service pensions, the pension is abated by the full amount of any National Insurance pension which the pensioner may have been paid, so that, clearly, is no answer.
A stop-gap, temporary expedient this Bill may be, but it cannot be right even at that; still less can it be right in the light of the pledges on which the Labour Party fought and won the last two General Elections. I will not follow the right hon. Lady into the question of parity. That is a sordid story, which has been debated ad nauseam in the House, and it would waste everyone's time to expose it again. The pledge upon which the Government are perhaps more inclined to rely, because it came from the Prime Minister in direct reply to a question from a public service organisation, was given at the time of the October, 1964, election, when the right hon. Gentleman said:
We have also called for public service pensions to be linked to some economic indicator, so that the pensioners are not only compensated for rising prices, but also receive their full and fair share in any rising national prosperity.

If the Bill is intended in any way to be an implementation of that pledge, it is not good enough. Most of the pensioners were not receiving—let alone any compensation for the rise in the cost of living—any share in what rising national prosperity there may have been during the last four years. However much one may wish to take a non-partisan approach to this problem, one must take the strongest objection when the results of what the Government do stand in such stark contrast with what they promised when fighting the election.
This is the heart of the Bill—I mean no pun—and it is a profoundly unsatisfactory one. The right hon. Lady said that of course there were a number of minor anomalies, which have been rectified, such as an increase in the category of pensioners entitled to increases, the extension of the increase to certain classes of overseas pensioner, and the removal of the residence qualification as she described it.
There was no mention of other hard overseas cases. Perhaps the Parliamentary Secretary to the Ministry of Overseas Development will be prepared to deal with these in winding up the debate. I have in mind such things as the hard case of the overseas pensioner who joined an organisation when it was a Government organisation, but which subsequently ceased to be so, and became what is sometimes referred to as a quasi-governmental organisation; such people who joined things like the Nigeria Coal Corporation, the Lagos Town Council, or Achimoto College. There are a number of others who are at present totally barred from getting increases. The Government do not regard them as being public service pensioners in the very limited sense of the word.
However, while we are glad that these minor anomalies are being dealt with, and welcome the adjustments, we regard the Bill as unsatisfactory and inadequate. It is what it is because no long-term, coherent philosophy has yet been worked out by the Government, and no adequate machinery has been established in four years. There is no once-for-all solution for the hardship problem of the very old pensioners.
For the rest of my speech I should like to turn from the Bill, which we shall debate in Committee, and examine what


should be done to bring reason, logic and justice to the tangle of anomaly, unfairness and hardship which characterises the present system. My remarks will fall conveniently into two parts—the immediate changes necessary to remedy hardships and improve the machinery, and the longer-term changes needed to establish a consistent pattern, based on a recognisable body of principle.
The immediate changes are those which my party is committed to, and was committed to at the last General Election. On the longer-term changes, I am making my remarks by way of opening a discussion which I hope will be followed up inside and outside the House on the principles and some of the issues which I shall briefly state.
Our first specific pledge is to regard the 1956 Act for what it was, a turning point, and to recognise that most of the cases of acute hardship represent the pre-1956 pensioners, who, from the time they retired up until 1956, were denied any but the most shadowy compensation for the erosion of the value of their pensions. They are the oldest pensioners, many of whom have no National Insurance pension. Under the Bill, many of them are getting the smallest absolute increases. By bringing their pensions up to the 1956 level, with the appropriate increases since then, we are doing no more than is necessary to do bare justice in their case.
Since the right hon. Lady has made a point of this, I make it clear to her that we in no sense regard this as a first step towards parity. It is a belated act of justice to offset the past erosion of the value of the pensions. Like her, and like my right hon. Friend the Member for Barnet, I see the very strong arguments of principle, quite apart from cost, against trying to introduce parity. The cost of this proposal was given in one of her Written Answers to me yesterday as £5 million or £6 million in the first year, or £9 million or £10 million if one includes the Armed Forces, as I think one would be bound to do.
We are not anything like restoring the purchasing power of these pensions to what it was when they were granted, and no one now expects that. But it is an essential, once-for-all step to remedy the real hardship cases. I regard it as

something of a disgrace that, for instance, the widow of a colonel who retired on the 1919 pay scale should now be enjoying a pension so low that she qualifies for supplementary benefit.

Mr. Palmer: I am listening with great care to the hon. Gentleman's argument. But since he says that the new principle—a very good one—was introduced in 1956 when his party was in power, could not it have made it retrospective?

Mr. Jenkin: One can always be accused of not having done what one wants to do now. I have not wearied the House, because we have had it all before, with the steady improvement in the pattern of Pensions (Increase) Bills from 1952 to 1962. It is all in the record. We want steadily to go on improving, and that is what I am talking about.
My second head relates to those professions and occupations from which, because of their nature, people tend to retire before the normal retiring age, I am thinking of policemen and firemen, and members of the Armed Forces. Under the present law, they do not receive their increases until they reach the age of 60; until then, their pensions remain what they were when they retired. That principle is retained in the Bill. We have substantial evidence of the hardship it causes, particularly to those who retire over the age of 55, who find it very difficult to obtain employment, though the theory on which the principle is based is that they can find employment. We therefore propose to reduce the age to 55. In a Written Answer yesterday the cost was given as £6 million, and we accept that.
Our third proposal, which is perhaps the most important, is a machinery proposal. We want to establish a regular, biennial review so that public service pensions keep in line with the cost of living. It is interesting to see in the White Paper published today that the Government propose a regular biennial review for the new graduated pensions. They cannot do less for public service pensions.
As the right hon. Lady said, the Bill comes after one of the longest gaps between such Bills. Other hon. Members recognise that it is the gap in which there has been the highest increase in the cost of living since we have had


Pensions (Increase) Bills. Over the five years since the first pension was awarded after the last Act came into force, that is, a pension awarded on 1st April, 1964, to the date when the Bill will come into force, 1st April, 1969, there has been about a 20 per cent. increase in the cost of living.
This is not good enough. These people deserve better than that, and more frequent reviews are essential, particularly to avoid what I mentioned earlier, the humiliating lobbying to which the pensions organisations feel they have to resort.
We gave these three election pledges in 1966, and we adhere to them. I repeated them at the Conservative Party conference at Blackpool, and I repeat them again today, and we stand by them. We recognise that they do not go as far as many of the organisations are pressing us to go. Yet we believe that they are realistic. They are honest, and they will have a high degree of priority when a Conservative Government is returned to office.

Mr. J. T. Price: I have followed the hon. Gentleman's argument to the best of my ability. Would he care to comment on the fact that during the past three years, during which there has been a delay in publishing a new Pensions (Increase) Bill, there has also been a wage freeze? How would his party deal with the anomaly that would be created if we had an automatic escalator bringing the pensions of all who had retired in the distant past up to parity when, for economic reasons, the Government are responsible for a wage freeze? It cannot be just brushed aside like that.

Mr. Jenkin: Far be it from me to try to reconcile the irreconcilable, which is what a great deal of the Government's policy consists of. We have never believed in a statutory wage freeze. If it creates difficulties for the Government, they are the ones who must get out of that.
These reforms, valuable as they will be, will only remove the worst features of a system that is fundamentally very unsatisfactory. I should like to tell the House something of the thinking of this side of the House about how, in the longer term, we might consider the way in which the public service pensions system could be modified and improved

and brought much more into line with current thinking. We are not yet ready to announce firm conclusions. There will, I hope, be a long public discussion about them. But it is right to tell the House something of the sort of matters we have under consideration, and to give some indication of how our minds are moving.
To begin with, it might have been thought that where there is a system distinguished above all for its diversity and complexity, one might work towards a single comprehensive system for all public service pensions. I do not regard that as possible. There are great differences within the different services, and pensions schemes need to meet the particular needs of different services. But it should be possible to establish a pattern of principles publicly spelt out, on which the system could be based. The three broad areas which we are examining are, first, the form of financing of public service pensions, including the question of funding; second, whether the contributions should come from the employee as well as from the employer, whether they should be contributory or non-contributory; and, third, whether there should be a greater harmonisation in the benefit structure.
First, on financing and funding, one answers, in effect, the question, "Where do the benefits come from?". Some schemes are fully funded, with separate investments held by trustees and administered in the normal way. Local government schemes are an example here. Other schemes are notionally funded. The contributions are paid to the Exchequer, books are kept, interest is credited, but the fund does not exist as a separate entity. An example here is the teachers' superannuation fund. Some schemes have no funding whatever but work on a "pay-as-you-go" basis—for instance, in the Civil Service and the Armed Forces.
There seem to be three main considerations in a discussion of the question of funding. The first is the guarantee of performance. A fund's primary purpose is to guarantee that the pensions will be forthcoming. Second, it is necessary in the public service, as everywhere else, that one should know the true cost of manpower. One should know what one's employees are costing, and this should include pension contributions.


Third, one would wish to avoid an undue concentration of power, to which an enormous State-funded pension scheme would give rise.
One might, therefore, draw the conclusion that, where the central Government guarantee the payment of the pension, that is sufficient certainty and no separate funding should be necessary in those circumstances. On the other hand, in the case of an independent authority, with no guarantee, it will be right to have a separate funded scheme with separate investments. Such authorities should not be encouraged to slough off their responsibilities to the Government to get them out of a difficulty should they run into it.
Then the question arises: if one has a central scheme which is not separately funded with separate investments, should there not, nevertheless, be notional funding in order to provide a true cost of manpower? There are those who argue strongly that the answer to that question should be "Yes". Increasingly, one will carry out complicated studies involving large investment decisions, in relation to computers, for example, and if one does not know the true cost of manpower one may well take wrong investment decisions. I add this comment, however. If one is to develop the principle of notional funding, it must be realistic, with a realistic rate of interest credited. At present, it is only 3½ per cent., with consequent deficiencies thrown up from time to time. One would wish to see that put right.
The second question is whether schemes should be all contributory or non-contributory. The Fulton Report deals with that and recommends that all Civil Service pension schemes should be contributory, partly to let the employee feel that he has a share, that he is a partner in providing for his own retirement, and partly to establish a better relationship between employer and employee in the management of the scheme.
At present, about 75 per cent. of public service pensions are contributory and only 25 per cent. are non-contributory. The old attitude which gave rise to the contributory pension was that the employee should be encouraged to save to help himself, and the employer would say, "If you do that, I shall put my

whack in, provided that you stay at work with me loyally to the end of your service". The new trend is to regard a pension as deferred remuneration. But then the question comes: why should a man contribute to his own deferred remuneration? These are difficult questions to which no clear answer can be given. They are very much bound up with the question of transferability of pension rights. However, if it is right that one should look for a single set of principles, and if one finds that three-quarters of a service pension system is already on a contributory basis, one would be right to argue, prima facie, that all should be contributory.
Now, the question of benefits. This, perhaps, is the most difficult area of change, because one would not wish to make anyone worse off. One would, therefore, be bound to make any new system apply mainly to new entrants, so that the process of change-over to a new system would be very slow. Moreover, much will depend on the social security review, the Report on which we have had today. I prefer not to comment on that until we have had far better opportunity to study it. My party is pledged to maintain an important rôle for occupational pension schemes, and, as the right hon. Lady conceded, public service schemes are an occupational pension scheme of some importance.
We consider that the scale of benefits which the public service pension scheme should give should be comparable with commercial practice. I hasten to add that this is, in general, already the case. No major change would be envisaged in that respect, and certainly one would not envisage any significant increase in costs.
I come now to the question of transferability. This is dealt with in the White Paper, and in the 20 minutes or so available to me before the debate I skimmed through as best I could the section on transferability. Ideally, all employments should give rise at the end to a single pension, based on accumulated contributions, with, wherever changes of employment have taken place, a slice of the fund or something equivalent being taken over. That is what is meant by transferability, though it is difficult to extend because there are so many different sorts of funds.
Failing that, there is preservation, and I gather that the Government have hung their hat on that. I hope that they will leave the question open so that full transferability may operate in those cases where it can. In the Civil Service, one already has partial transferability or preservation. An Assistant Secretary over 45 years of age can transfer his pension rights and take his contributions with him. Below that it is not possible. It would be healthy and correct that this right should be extended throughout the Civil Service, as the Fulton Committee recommended. I entirely endorse that view. There will have to be a qualifying period, and during the qualifying period provision for contributions to be returned. Here, however, I make a personal point, realising that I shall not carry all my hon. Friends with me in it.
I do not regard a pension scheme as a sort of "piggy bank". In my view, once one has the right of transferability there should not be an automatic right to the return of contributions instead. I realise that the Government take a different view, but a pension scheme is a pension scheme, and it should not be regarded as a means of temporarily saving and then, when one changes one's job, having one's contributions back again, or, indeed, changing one's job in order to have the contributions back. That seems to be an abuse of the system. However, I recognise that as a personal view, and I shall not pursue it. We must, none the less, get away from what someone described as the new feudalism, the system under which a man is tied to a particular job because he is tied to a pension and cannot take it with him.
I have discussed these issues in general terms, and I emphasise that I make no commitment on behalf of my party in regard to the general matters. I am opening the subject for discussion. I believe that the considerations which I have put to the House represent a worth-while attempt to show how one could introduce for the first time—the Government could themselves have done it if they had given their attention to the matter—a coherent body of principle into a system notable for its diversity, its lack of logic and its internal inconsistencies. I hope that these points will be debated both inside and outside the House with the careful

scrutiny which, I believe, their importance deserves.
We welcome the Bill as necessary to go part of the way to compensate retired public servants for the erosion by inflation of their pensions. We are disappointed that it is just another holding operation when we expected much more, that it does not deal adequately with the older and, therefore, poorer pensioners, that it does not provide for a regular automatic review, that it does not reduce to 55 the age at which increases become payable, and, above all, that it contains no hint of long-term thinking on the fundamental problems of bringing order and principle into the chaotic system of public service pensions.
Our public service pensioners deserve better than that. While we shall not in any way seek to delay the Government's timetable for the Bill, we shall aim to improve the Bill substantially in Committee. On that basis, I shall advise my right hon. and hon. Friends, when the Question is put, that we give it an unopposed Second Reading.

5.9 p.m.

Mr. Douglas Houghton: In the early part of his wide-range speech the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) presented the House with the familiar spectacle of Satan rebuking sin. This is what harms politics, because many people think that the trouble with politicians is that the truth is not in them.
The hon. Gentleman had no right to reproach the Government for failing to find a complete and satisfactory solution to a problem which evaded the talents of his right hon. and hon. Friends for so many years. Neither side of the House can feel proud of our record on public service pensions. Let us be candid about it. This is the tenth Bill in 48 years. It follows the traditional lines of the last 10 to 15 years.
I remember the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) assuring the House 10 years ago that he would apply his mind to a more satisfactory basis of adjusting public service pensions. I am glad to see the right hon. and learned Member for Chertsey (Sir L. Heald) in his place, because I so well remember the severe dressing-down that he gave to his own


Front Bench for bringing forward yet another Pensions (Increase) Bill on the lines which had been so strongly criticised by the House time and time again. It was under the agony of the right hon. and learned Gentleman's strictures that the Financial Secretary of the day made that promise; but he did not come up with a solution.
We in opposition gave pledges that we would apply our minds to this problem, too. The hon. Gentleman quoted a statement made by the present Prime Minister as Leader of the Opposition just before the 1964 General Election. I ought to remember that letter, because I drafted it. It represents our sincere intention at the time. In 1964 and 1965, when we were in power, we realised that this question would certainly become deeply involved in our review of social security. It was clear that if we were to abandon the two-tier structure—the flat-rate scheme and the graduated scheme—and replace it by a wholly graduated scheme of contributions and of benefits, the occupational pension would have to have a new relationship to the State scheme.
It was comparatively easy in 1960 to deal with the occupational scheme, because it had to be dealt with only in relation to the graduated scheme. So the contracting out arrangements enabled occupational schemes to contract out of the graduated scheme if they fulfilled the prescribed conditions, but that would not be possible under a wholly graduated contributory scheme.
I was the Minister responsible for all this at the time. I felt very keenly indeed that the whole position of occupational pensions would have to be reconsidered afresh in relation to the State scheme as we proceeded with this major review. So, in 1965, we justified introducing another Bill along conventional lines. The Chief Secretary explained to the House why regretfully and with acute disappointment we had yet again to introduce a kind of holding Bill.
It is, I suppose, quite an extraordinary coincidence that we are discussing this Pensions (Increase) Bill on the same day as the publication of the White Paper resulting from the social security review—Cmnd. 3883—and we can see more clearly today than before what this new

relationship has to be. Therefore, if we are to exercise our forgiveness and forgive those on the other side of the House who have trespassed against us, as well as find some excuses for ourselves, we might regard today as the beginning of a fresh start.
It is sad, I agree, that it has to be for the moment the same sort of Bill with the same sort of adjustments and the same absence of recognisable criteria in making them. It is not until the Minister makes a Second Reading speech that we know the foundations of the principles in the Bill. I am not a great devotee of White Papers, but I sometimes think that explanatory memoranda are a great help in enabling right hon. and hon. Members to understand the underlying motivation and the considerations leading to complicated proposals.
I cannot forbear from mentioning that in the 1965 Bill we solved some highly complex problems relating to particular types of cases which our predecessors had declared time and again were insoluble. To give only one example, before 1965 there was no satisfactory solution to the problem of how to calculate the pension increase for a man who had formally retired from a higher position, stepped down to a lower one, and then finally retired from that subordinate position. Whichever way the calculation was done gave rise to anomalies and to comparative grievances. I recommended a solution at the time. Anyone who likes to look up the debates of those years will find it there. In the end, we decided to take a chance on it; and there it is, with no serious consequences.
The Bill must be considered in relation to Chapter 5 of the White Paper and also in relation to recommendations of the Fulton Report on the Civil Service, Cmnd. 3638. The first question—it is one we have been asking for a number of years—is: why is it necessary for the House to have to go through the processes of legislation on the comparatively routine adjustment of public service pensions when wages and other conditions of service are negotiated by agreement and brought into operation through the machinery of consultation and the Whitley Council? This can be out of all proportion.
Wage and salary changes in the public services can be far more expensive than


pensions increases, but they are done through the normal process of wage and salary negotiation. Millions of pounds in extra pay for the public services can be written into public expenditure by that process, but the pension of a Civil Service pensioner cannot be altered by sixpence without a Pensions (Increase) Bill.
The Fulton Committee had something to say about this. I will not quote it in full, because it will be found in page 174 of Volume 1 of the Fulton Report. The Committee hoped that some alternative to the legislative process would be found. It said:
We think this to be an unnecessary complication, besides wasting parliamentary time. We do not dispute that Parliament should exercise a proper control over this large element of staff expenditure. But it seems to us that ways could be found of ensuring this that would yet enable changes in the pension scheme to be made more promptly and with less fuss. We recommend that they should be looked for.
I hope that this will form part of the consideration to be given to future superannuation arrangements in the public service.
There is also the question of a contributory scheme, which the hon. Member for Wanstead and Woodford mentioned. After my criticism of the early part of his speech, I want to acknowledge that at the end we listened attentively to constructive thought and practical suggestions about the future of public service superannuation. The Tomlin Commission, as long ago as 1931, recommended that the Civil Service scheme should become contributory, and I must take my share of responsibility for the decision not to implement that recommendation. I think that we were mistaken but the Treasury at the time acquiesced in that decision. At the time, there was a disinclination in either staff or official circles to go into a contributory scheme. I think that we were mistaken, because the whole question of the adjustment of pensions after retirement would have been easier under a contributory than under a non-contributory scheme.
There was a time in 1964–65, when the Civil Service was getting a general increase in pay of 4½ per cent. I had some calculations made which suggested that if the Civil Service were to agree to pay that 4½ per cent. for every year towards

a superannuation fund, it would be possible to top up all the pensions of those in retirement to very near parity and to ensure something comparable for all future retirements for quite a few years to come. That might have been a possible solution to some of these difficulties, if we had had a contributory scheme.
The Fulton Committee had something to say about that, too, and recommended that the question of contributory schemes should be considered. We read in paragraph 148 of the White Paper, "Proposals for Earnings-Related Social Security", that a committee has already been set up in the Civil Service to consider this and other aspects of future superannuation.
The principle to be followed under the White Paper—of a periodic review of the level of the State pension—obviously carries with it an implication, although not at the moment a directive, of similar treatment for occupational pensions. Some of the pensions fund people told me long ago not to be afraid of making occupational pensions dynamic. They said that it had to come and that there could be no other satisfactory basis for superannuation. They said that the concept of the immutability of the pension as at the date of retirement, based on whatever previous salary figures or averages were taken, could not endure in an expanding economy, that it was not only a matter of inflation, but of rising standards of which the pensioner was entitled to his share.
We are now on the threshold of important new thinking about the future of Civil Service superannuation and this will range over the whole of the public sector pensions in conjunction with the review of the State pension scheme.

Mr. Patrick Jenkin: I am not sure whether I have followed what the right hon. Gentleman is saying. He appeared to me to be advocating not merely keeping pace with the cost of living, but that all occupational pension schemes, State or private, should provide for pensioners to enjoy real increases in their standards of living. Is that, in fact, what he is advocating?

Mr. Houghton: I am saying that the basis of an occupational pension, along with the State pension, should be adjusted from time to time during retirement to take account of changing social


and economic circumstances in the country at large.
There are undoubtedly flaws in the Bill. The effective date should have been earlier. It is not enough to say, as my right hon. Friend did, that we are not as bad as "they" used to be, or that we have done better than one year, or have equalled another. Changes have been fairly rapid in the last three years and we have also to acknowledge that the cost of living has risen quite sharply. Indeed, it has been part of the Government's economic policy to keep down private consumption by a combination of measures leading to a rise in the cost of living, and we might as well acknowledge that, too.
However, I do not believe that the cost of living is an entirely satisfactory basis for the adjustment of pensions. Without accepting the ultimate concept of parity, I nevertheless feel that salary and wage movements are a better index. I was always against the idea of a cost-of-living adjustment for retirement pensioners. I believe that the movement of wages would make a much better index for the adjustment of retirement pensions. The cost of living is merely a form of compensation for rises in living costs. It does not concede a real increase in the value of a pension. It does not concede a share of rising prosperity, but wage and salary movements usually do.

Mr. Lubbock: The difference between what the right hon. Gentleman is proposing and full parity is that instead of using the salaries of the grade from which the pensioner retires, the criterion is averaged over the whole of the people in employment. Would there be much difference unless the current salary for the particular grade was changing more rapidly than wages and salaries as a whole?

Mr. Houghton: I do not know exactly how it would work out in particular cases, whether one would have to take grade by grade, or zones of employment, or a public service factor as a whole. Various alternatives would have to be considered. A good deal of research and calculation would be necessary before finding what might be the acceptable criterion. This is what the Financial

Secretary of the previous Conservative Government undertook to study, but it never came to fruition. Anyhow, I think that cost of living alone is not a satisfactory basis for the adjustment of pensions, for the reasons I have given.
When considering the period over which calculations must be made, whatever criteria are adopted, we must bear in mind that the cut-off date for the last pensions increase Measure was 1st April, 1964. It is not enough merely to consider what happens between the date of one Measure and the date of the following Act. These are tricky points in presentation and this matter will have to be studied in Committee to see where the truth really lies about what has happened since the last adjustments were made and the basis on which they were made.
The cut-off date of 1st July, 1967, this time seems a little hard. Many changes have taken place, even since July, 1967, and I therefore have reservations about this date. I understand that the Money Resolution is sufficiently widely drawn to enable a very full discussion of the details of the Bill in Committee, and I hope that this will prove possible.
It is clear that the Bill is welcomed. We have been waiting for it. Indeed, the Financial Secretary had to give a strong hint that the Bill was on its way when we last debated public service pensions, a few months ago. Had he not given such a hint, he would have had a far rougher ride than he got on that occasion.
The Bill is not only welcomed, but good, though not as good as it might have been. In looking at the past and at the new opportunity which is now given to us to study the wider issues of pensions—occupational and State—the House can feel satisfied that this Measure represents a further step towards a more complete and satisfactory solution of this general problem. We are giving rough justice, and thus an element of justice, to Civil Service pensioners who are deserving of the consideration of the House.

5.33 p.m.

Mr. J. C. Jennings: As a former headmaster who qualifies for pension, I wish at the outset to declare my interest and so to conform with the rules of the House. I wish, secondly, to make


it clear that I approach this serious problem of public service pensions in a nonparty and non-partisan way. I shall try to be factual and objective.
As the right hon. Member for Sowerby (Mr. Houghton) pointed out, we are considering a problem which has been with us for many years. In my experience in Parliament, there have been successive Measures on the subject since 1955, beginning, in my case, with the 1956 Act. In those days many of us were highly dissatisfied with the approach of the then Government—I admit that they were a Tory Government—and this, too, was clearly shown by the right hon. Member for Sowerby.
I have clear memories of the days when my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) was chairman of the Heald Committee, which was appointed by the 1922 Committee of the Tory Party, and when I was the honorary secretary. We exerted tremendous pressure on the then Conservative Government to take action in this sphere.
I regret that Mr. Speaker is not in the Chair because he would recall how, as a back bencher, he spoke with great skill and sincerity on this subject. We must, therefore, pay tribute to the many hon. Members who have contributed towards finding a solution to this difficult problem. I include the many hon. Members on both sides of the House who in recent months have signed two Motions in an effort to bring the problem to a head.
I welcome the Bill, as I have welcomed every other Measure of its kind. I have, however, welcomed them all with certain reservations, and those reservations apply to this Measure. It is strange that, since 1944, we have had eight Acts on this subject. This will be the ninth. Such a number in 25 years is quite something, yet the problem is not solved. This Measure follows the usual pattern because each one, certainly since the new method of the escalator clause was invented, has had three major defects.
I am being completely non-partisan about this. First, in every case the Measure has been the result of belated or delayed action by the Government of the day. In the interim period successive Measures have been introduced while rising costs have gone on without adjustment to pensions, in effect meaning that

the people with whom we are concerned have been on fixed incomes. Secondly, when an adjustment has been made, it has been only a partial adjustment, and that is the case again with this Measure.
Thirdly, since the escalator clause was introduced, each Measure has contained a cut-off date which has brought grave hardship to many people. In the 1965 Act the operative date was 1st January, 1966, but no increase was allowed for under that Measure for pensioners who came into the Scheme after 1st April, 1964. That meant that any pensioner who retired after 1st April, 1964, had to wait five years, during which time the cost of living went up by about 20 per cent., before getting the benefit of any increase. That was tragic. Five years elapsed and they received no compensation whatever for a fantastic rise in the cost of living.
This brings me to the root of the problem and, since it is well recognised, I will not spend much time on it. The root is the steady creeping inflation which the economy, under many Governments, has suffered. There are four background points in this connection which we should note. The first is that people in Britain—this applies to other countries which have been suffering from steady inflation—who possess economic or political power can protect themselves. Hon. Members will appreciate what I mean—trade union action, strikes, pressure lobbies and so on. These people almost guarantee themselves annual rises to compensate for inflation.
Secondly, by contrast, pensioners and the elderly cannot exert such political, industrial or economic pressure. They rely on hon. Members to create a lobby for them. That is what we have been doing. Year after year we have been trying to exercise pressure on their behalf.
Thirdly, pensions increases depreciate in value almost as soon as they are awarded. The right hon. Member for Sowerby wondered whether it was a remarkable coincidence that we should be debating this Measure today when, only an hour or so before the debate started, a White Paper on "National Superannuation and Social Insurance" was published. If the time was purposeful, it was very clever, and I would approve


the tactics, looking at them objectively. If it was accidental, it was fortuitous and very opportune.
I should like to make one quotation as evidence of what I am saying about pensions depreciating in value almost as soon as they are awarded. Paragraph 117 of today's White Paper states:
Thus, while many schemes provide pensions which are adequate at the time of retirement, there is seldom any guarantee that their value will not be eroded as time goes on. Some old people are therefore faced with the prospect of steadily diminishing resources at the same time as their capacity to improve their circumstances is getting less.
That is today's White Paper. It shows that the effect on those who retired years ago is especially hard.
That brings me to the hardy annual of the problem of parity. The two Front Bench spokesmen in this debate, the Minister and my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin), tended, certainly on my side of the House, to brush the problem of parity under the table. Perhaps it would be fairer of me to say that they dismissed it. For a long time parity has been a controversial question.
My definition of parity is that the pensions of those who retired years ago should be the equivalent of the pensions they would receive if they retired now. Their pensions should be reckoned on that basis. I recognise that when the Heald Committee was set up we were given figures showing that the cost of parity at that time would have been £11 million. Within a short while we were given a new figure of £22 million. The figure this afternoon was given as £100 million. I realise full well that it is impossible for any Government to implement it at that figure.
In the light of that impossibility, however, I want to ask two questions. Why should the standard of living of a pensioner depend upon the date at which he retired? That is what happens. Should he not at least be guaranteed that the purchasing power of the pension at the date when it is awarded will be fully maintained? We must recognise the justice of those two propositions. Pensions Increase Bills are no solution, therefore, to the basic problem.
It is with some diffidence that from the Tory benches I welcome the White Paper. I do not say that I approve of it, because I have not had time to read it. It was issued only 20 minutes before I took my seat in the House for this debate. I have scanned certain parts of it. When I look at the index, however, and at various summaries and paragraphs, particularly on occupational pensions, which interest me and which I have read, I see that today's Bill is probably a holding operation, much as I deplore it and much as I regret it. Seeing it in that perspective against a background of action in the shape of a grand, almost grandiose, scheme in some years' time, I have to recognise that probably the Government had no option that to do what they have done today.
Parity has always been rejected on the ground of costs, but in the debate on the 1965 Bill the Chief Secretary to the Treasury referred to the radical review of the social security system which was being carried out, and which, he said
when complete, will provide us for the first time with a rational framework within which we can build a constructive pensions policy in both the public and private sectors."—[OFFICIAL REPORT, 18th November, 1965; Vol. 720, c. 1353.]
That was in 1965.
In 1969 we are only now getting the White Paper, and there are months, and probably years, of discussion before us. Nothing has been done in the three years since the Chief Secretary made those observations, but in the meantime there have been price increases all round. In the light of all this, it is a remarkable coincidence that the White Paper has been published at the same time as today's debate.
Let me turn to my own party. We have had a highly constructive and thoughtful speech from my hon. Friend the Member for Wanstead and Woodford, which showed that my party is giving tremendous thought to this subject.

Mr. John Mendelson: Always speeches.

Mr. Jennings: I did not catch what the hon. Member said.

Mr. Mendelson: Always speeches from the hon. Member's party, but no action.

Mr. Jennings: We cannot take action while we are in opposition.

Mr. Mendelson: The party opposite were in government long enough.

Mr. Jennings: If I am being goaded, I must be partisan; so the hon. Member should keep quiet and let me continue objectively.
My party has fixed 1956 as a kind of fulcrum around which the whole pensions scheme and the plan for the future will turn. I asked my hon. Friend and my party months ago to cost our proposals. Speaking from memory, I think that the cost would be between £5 million and £6 million in the first year and £10 in the second year or subsequent years.

Mr. Patrick Jenkin: It is between £5 million and £6 million excluding the Armed Forces and £10 million including the Armed Forces.

Mr. Jennings: I was thinking of the £5 million—£6 million for public service pensioners.
I should like my party to look at this again. Of course, it is not a step towards subsequent parity, but in practice it is. As time lengthens, I should like the fulcrum point to move also so that we move up at least in our conception of partial parity at 1960 or 1962.
I quarrel with the Bill, as did the right hon. Member for Sowerby, concerning the operative date. It is a bit mean to fix 1st April and not 1st January when there has been such hardship. It is all very well for the Minister—I am sorry that she is not present—to compare the intervals between Bills. The interval between the last Bill and this one has been accentuated by a tremendous rise in the cost of living, which was not equalled during any other interval between similar Bills. I must warn the Minister and her colleagues that if my Front Bench does not put down an Amendment to alter the operative date to 1st January, some of us on the back benches will.
The escalator in the Bill interests me. The Minister was very clever. She took a descending scale from 18 per cent. At the bottom half, from 1963, the steps dropped by 2 per cent., whereas previously they had dropped by 1 per cent. It is different if one starts at the bottom of the escalator and goes up. In respect

of a pension up to not later than 1st July, 1963, the steps go up by 2 per cent. After that, they go up by only 1 per cent. Yet the purpose of the Bill is to help people who have been retired the longest. I do not know whether my logic is wrong, but if the steps went up throughout by 2 per cent. those retired the longest would get far better treatment.
In the light of the friendly criticism which has been made today, the Government should have second thoughts. They should try to improve the Bill in Committee, and I wish them good luck in doing so.

5.51 p.m.

Mr. Arthur Palmer: It is always a pleasure to follow in debate the hon. Member for Burton (Mr. Jennings), because he has great sincerity and knowledge on this subject. One of the problems of following him on public service pensions is that it is very difficult to disagree with him.
I congratulate the Government and my right hon. Friend the Paymaster-General on introducing the Bill, but I did not think that my right hon. Friend was very convincing about the date of application of the Bill. She argued for 1st April instead of 1st January, which would seem to be the common sense date, on the ground that there had always been a gap in time of a certain size between successive Acts and that the gap on this occasion was no greater than usual. But one should not try to construct an eternal principle by averaging out past expediences. I hope—and here I agree with the hon. Member for Burton—that the date of application will be looked at again in Committee.
The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) made a most interesting and generally constructive speech from his Front Bench. I was, however, surprised that he devoted so much attention to parity for the pre-1956 pensioners. I know that this is an important subject from the human point of view, but many of the pre-1956 pensioners will soon be well into their eighties. If they were to be helped, they should have been helped a long time ago, and, as I suggested in an intervention, the time to do it was when, in 1956, the Conservatives introduced the principle of the sliding scale for the first time, I think.
The hon. Gentleman was not giving away a great deal. I know that he intended to be helpful, but it did not seem to me that he was over generous in talking about parity for the pre-1956 pensioner alone. If we are to deal with parity, we must come forward from 1956.

Mr. Patrick Jenkin: As I pointed out to my hon. Friend the Member for Burton (Mr. Jennings), we recognise that this proposal will be expensive. It will cost £10 million. That is not peanuts. It indicates that there are many people who need help.

Mr. Palmer: The normal span of human existence being what it is, they could not now be helped for long. If they were to have been helped, it should have been done a long time ago.
May I say as one who takes a considerable interest in the affairs of the nationalised industries, and particularly the electricity supply industry, that the Bill is eagerly awaited and welcomed by many besides public servants as defined in the Bill and, for that matter, members of the Armed Forces who are indirectly covered. There are pensioners and prospective pensioners in the nationalised industries who have to look to the precedent set by Pension (Increase) Acts such as this Bill will become for their own pension increases.
My right hon. Friend the Paymaster-General said, rather loosely—I do not know whether she is conversant with all the facts—that it was always open to the managements of the nationalised industries to make their own arrangements There are two answers to that. First, in the nationalised industries, particularly in the electricity, gas and road transport industries, a considerable number of pensioners were formerly employed in pre-nationalisation municipal undertakings. If nationalisation had not come about, this Bill would have applied directly to them. Therefore, there is bound to be an administrative link between Pensions (Increase) Acts and many pensions paid out by the nationalised industries.
Secondly, the nationalised industries' pensions schemes are statutory schemes and any changes proposed in them are subject to ministerial approval by law.

Nationalised industry pensioners are bound to look to Pensions (Increase) Bills, as do direct public service pensioners, because it is only when a Pensions (Increase) Act sets a precedent that the Departmental Minister responsible will consider seriously any application by the management of a nationalised industry for a change in pension levels. Therefore, it is no good seriously arguing, as my right hon. Friend did, that the nationalised industries could make the change at any time on behalf of their pensioners if they wished to do so.
As I say, the virtues in this Bill will be welcomed by many thousands of pensioners outside the public service. Its defects will be equally deplored by them. The first virtue of the Bill is that it exists at all. Secondly, the higher starting scale rate of 18 per cent. is a step forward. The continued preservation of the sliding scale principle is welcome. These are all good things in the Bill.
The principal defects are these. First, there is no gesture of any substantial size towards the principle of parity. I was puzzled by something which my right hon. Friend the Minister said, namely, that it was administratively difficult to deal with the pension of a person who retired, say, 10 years ago or more in relation to the pension of someone in comparable work who retired more recently.
My right hon. Friend said it was very difficult to do it because we could not compare necessarily over a span of years grade for grade, because jobs and designations changed. I have never been able to see that this is a real problem. I should have thought it quite possible to average out salary or wage advances, construct an index, and then apply it. It is not really necessary to work it on an individual basis of grade for grade.
The second greatest defect of the Bill—and it is still a tremendous disappointment to many of us—is that, once again, as my right hon. Friend the Member for Sowerby (Mr. Houghton), who spoke with great knowledge, just now said, it is worked on the "sufficient for the day" principle. Once again, it seems it has been a question of adjustment by the Government in response to outside pressures, so that they think that now they must bring in another Pensions (Increase)


Bill, that the time is about ripe for it, and they will go by the models of the years gone by. This is a bad system. That has been acknowledged by my own party, certainly when it was in opposition, and it is acknowledged by the Conservatives, now that they are in opposition, to be a bad system.
To refer again, for a moment, keeping myself in order if I can, to the pensioners in a nationalised industry, the electricity supply industry. They are very conscious of the bad present system because the Electricity Council and the staff unions in the electricity supply industry have had before the Government, through the Ministry of Power, for about three years now a domestic scheme of their own, a scheme which is intended to break away from this piecemeal approach. It is a scheme which, to put it shortly, is intended to insert in the standard staff pension fund, actuarially funded, an anti-inflation device—

Mr. Deputy Speaker (Mr. Harry Gourlay): The hon. Member was quite right when he said that he may refer incidentally to those schemes, but he must not pursue them in so much detail as he is doing.

Mr. Palmer: You create for me a certain difficulty, Mr. Deputy Speaker, but I will do my best to keep in order.
That scheme could well be a model in future for legislation of the character we are now considering; a scheme by which pensions would automatically increase, after retirement, by a stated amount; the pension five or ten years after retirement would automatically be greater than it was at the time of retirement. There are several arguments for it. An obvious one is that in a full or nearly full employment society there is cost-inflation with rising wages and salaries and also rising prices.
Moreover, it is when a pensioner has been retired for 10 or 12 years that his expenses really begin to mount, because illness is more common then, his health is not as good, it is not as easy for him at that stage to take up part-time employment. Furniture is beginning to wear out, clothes have to be replaced, and so on. So the principle of having for the worker, on a contributory basis, an actuarially arranged pension which increases

automatically after retirement is, in the modern age, the soundest principle.
As I say, this is the kind of principle which one nationalised industry in my knowledge, and both sides of that industry, is anxious to introduce. The proposal has been in front of the Government, which, in practice, means in front of the Treasury, for, I think, three years. As yet the Government are unable to make up their mind. What the Government say is that before agreeing to a scheme of this kind they have to see how it is to be fitted into the promised general review of social security.

Dame Irene Ward: Is this not rather peculiar? I have had questions on the Order Paper, and two today, about increased pensions for electricity and gas industry pensioners. Is it not a rather peculiar answer, that answer which always comes back to me, that this is a matter for the boards of the industries, while when a board, as I understand the Electricity Council does, wants to introduce a scheme it cannot get on with it because the Treasury then intervenes? This, to me, does not make sense. I should like to know which is what and what is which.

Mr. Palmer: If the hon. Lady is in order I shall possibly be in order in answering her for a moment. I think that the answer is that these nationalised industries' schemes are statutory schemes and depend on Ministerial approval before they can be properly dealt with.
So I am arguing that this kind of principle, which as I say, one nationalised industry—electricity—is seeking to introduce, should be applied generally. We now have before us the social security White Paper, so we can look at the prospect possibly of giving to the electricity supply pensioners permission for their change fairly soon.
I conclude by saying I am disappointed that the Bill is still on the old standard model. In view of everything which my hon. and right hon. Friends who now sit on the Front Bench used to say when they were in opposition—and I used to say it with them, though I was out of the House at the time—I should have thought that it would have been possible for it to have been an enabling Bill which would have given the Minister, possibly


by regulations, power to make adjustments in public service pensions at, we will say, two-year intervals. I cannot for the life of me see why that should not have been done. I should have thought that had that principle been introduced into the Bill it would still have dovetailed into any new principles of national social security which are proposed by the White Paper. It would have dovetailed just as well as this present legislation on the former model.
With these criticisms made, I certainly sincerely and heartily welcome the Bill as a measure that will give much-needed relief to many.

6.8 p.m.

Mr. Rafton Pounder: At the outset of the very few remarks which I intend to make I wish to say how much I, too, like my colleagues on this side of the House, welcome the Bill, although, of course, as has already been said, there are quite a number of shortcomings in it.
The hon. Gentleman the Member for Bristol, Central (Mr. Palmer) raised a very significant issue in his last remark. Not only are we not having public service pension increases at regular intervals, but also these increases are dependent not only for their timing but for the amount of pension increase, upon the generosity and/or the whim of the Government of the day. I accept that we have perhaps grown accustomed to the situation whereby the whole range of pensions, including public service pensions, the ordinary State retirement pension, the Armed Forces pension, are anomaly ridden, but what I find so grievous is that there seems to be so little effort to try to take some of the warts out of the existing legislation.
We hear a great deal these days about the restructuring of our social service benefits system. I for one look forward with the greatest interest to this restructuring when the time comes, but here, with this Bill, there was an opportunity, even though it is a Bill limited to a somewhat specialised category of pensioners, to make an effort, so to speak in isolation, towards solving the restructuring problem. This Bill, like its predecessors, merely upgrades the previous

Acts and thus perpetuates what has become a traditional triennial pattern.
In 1965, on the last occasion when a Bill of this kind was introduced, the Chief Secretary, when presenting the Bill for Second Reading, referred to the increase being a concession rather than a right. I find this disturbing, since he went on to say that the Bill was aimed at dealing with the problems of hardship rather than of legal liability. I cannot, however, dispute that that was so at that time, and it is still so today. Coming back to the argument that we are trying to restructure our concept of social service benefits, this surely would have been an opportunity to include a Clause to the effect that this is a pension increase as of right, rather than to go through the procedure every time as if there were a begging bowl needed for the passage of such legislation.
I know that debates on the occasion of Pension (Increase) Bills are non-partisan, and I have no desire to break with that tradition, but it is no use right hon. and hon. Members opposite contending that, on the subject of parity of public service pensions, there was not a pretty substantial hint that parity would be part of the Government's programme, both in 1964 and in 1966. I do not make the bold statement that an election promise has been broken, but there certainly was a hint, and in your country, Mr. Deputy Speaker, as in mine, there is a phrase that a nod is as good as a wink to a blind man.
The right hon. Lady, in introducing the Bill, presented formidable arguments against the conception of parity. Apart from the cost argument, about which I shall say a word in a moment, I cannot believe that it is beyond the actuarial skills of Whitehall to devise a system whereby parity can be made realistic and workable. She spoke about the regrading of the Civil Service promotional scales, and I accept that this may well happen, but surely one job can be equated with another, whether or not the scale is altered. I find it hard to accept that it is beyond the wit of man to devise the system of parity which, in our hearts, we would all like to see.

Mr. Lubbock: I would point out to the hon. Member that it is not the policy of his party.

Mr. Founder: I would point out to the hon. Member for Orpington (Mr. Lubbock) that, even on an occasion such as this, hon. Members may express a personal opinion as distinct from a party opinion.
I hold passionately to a belief in the principle of parity. I know that the cost is about £100 million. The cost of the Bill is about £34 million, and there is, therefore, a shortfall of £70 million. That is, by any standards, a sizeable figure, but hon. Members can surely cast their minds back to an occasion virtually 12 months ago to the day when a Bill was introduced to spend just such a figure of £70 mil ion on the nationalisation of bus companies.
I do not want to inject a controversial argument All I say is that, while £70 million may be a large sum of money, there is no reason why the money cannot be found if we want to find it. We should get our priorities right in public expenditure. I regard money spent on pensions, whether in the public service or in a wider field, as money well spent.
I would like to mention a specific anomaly, although I do not know how it can be overcome. A constituent of mine, who is a retired Post Office official, telephoned me at the weekend to tell me that he had retired at the end of a given month after 40 years' service. His pension was calculated on the actuarial scale for that time, which was, I think, 40/80ths of the average of the last three years' salary. A couple of months after he retired a salary increase backdated for about six months, was granted. By virtue of his retirement two months before the increase became effective, he lost the increased pension calculation which he would otherwise have received. Instead of taking fixed dates, such as 1st July or 1st January, could there not be introduced a sliding scale when increases are in the pipeline and are virtually signed, so that these increases which become operative subsequent to retirement, but relate to a period when a person was working can be taken into account?
May I elaborate on a point which is near to my heart and which was hinted at by my hon. Friend the Member for Wan-stead and Woodford (Mr. Patrick Jen-kin), and it concerns the category of person known as the quasi-Government

employee. In the Pensions (Increase) Act of 1962, colonial servants were graded for the first time as public servants, and were thus permitted to derive pension benefits under the Act. On that occasion, and in 1965, no provision was made for the quasi-Government employee working in a semi-Government institution abroad. My hon. Friend mentioned certain West African authorities, including the Achimoto College and others, but this is not a problem which is confined to West Africa.
Despite representations on the point in 1965, and I read only yesterday the Committee procedings on this subject, nothing was done to provide pension benefits for this category, and the Bill makes the same omission. I hope that the Parliamentary Secretary, in winding up, will not reiterate the argument which he previously advanced, that only Crown servants can benefit under the Bill and quasi-Crown servants are not in this category. When a group of persons has been recruited largely by Crown Agents on the same salary scales and on the same conditions of service as an ordinary colonial servant, it is reasonable that such persons should be included within the framework of pensions made available in 1962 to colonial servants.
I conclude with a point which arises directly out of the situation of the quasi-Government employee, namely, his widow. Many such employees contributed specifically to pensions for their widows on the understanding that their widows should be treated on the same basis as the widows of Government servants. This has not happened. I ask the Government to include, between now and the Committee stage, a Clause to take account of the quasi-Government employee, since I believe that this is an anomaly which could be rectified without too much difficulty.

6.18 p.m.

Mr. Thomas Steele: I cannot help but admire the enthusiasm of the hon. Member for Belfast, South (Mr. Pounder), but he was expecting too much when he thought that perhaps the Bill was the proper medium for a comprehensive review of the social services.
The hon. Member went on to speak about the Post Office official who had retired, and suggested that the dates


should not be fixed but should be according to a sliding scale. My experience is that no matter which date is fixed, there will always be people falling outside it; and this could still have happened to the Post Office official.
I appreciate the difficulties about parity. In the industry from which I come there have been many changes in the descriptions of the classes over the years, and I understand the problems which apply. The basic reason we have not had anything from the Government about parity is that they cannot make available the necessary money. The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) made it quite clear that he would not commit his party to that principle, and, when dealing with his own policy and suggesting the year 1956, he told us that it would cost £20 million, which, in his view, was a lot of money. I cannot see the Opposition accepting the advice of the hon. Member for Belfast, South.
I am sorry that the hon. Member for Burton (Mr. Jennings) is not with us, because I want to pay tribute to him for his work on pensions. However, I feel that he is being much too optimistic in his view of the Government White Paper which is published today. I have not had the opportunity of reading it, Mr. Speaker, and, during your absence from the Chair, there has been a general discussion about it. The impression coming from the hon. Member from Burton was that something would be done to avoid the problem of retired people who see the value of their retirement pensions diminishing over the years.
The problem is not answered in the White Paper, because it can only deal with those who are in employment and will retire some day. Our problem is with those who have retired and who, over the past years, have seen their pensions falling heavily in value, when they contributed to them in the hope that those pensions would look after them in the evening of their days.
The hon. Member for Wanstead and Woodford surprised me by choosing 1956. Surely it would be more relevant to take 1958. The National Insurance Scheme came into operation in July, 1948, and there was a proviso that a person had

to be in the scheme for 10 years before he qualified for the State pension. I would have imagined that the period up to 1958 would take into account all those who had not been able to be in the State scheme, and in any general discussion of retired people, my sympathy is with those who retired prior to 1958 and are not getting the benefit of the State scheme.
In the past, the question of who are public servants has been raised on a number of occasions. Mr. Speaker, you will know immediately that I am about to venture on to thin ice. However, my right hon. Friend referred to it in her opening remarks, so perhaps I may be permitted to mention a speech by my right hon. Friend the Minister of State, Department of Health and Social Security, who was at the time at the Ministry of Transport. On 25th March, 1965, he replied to a debate at 7.36 in the morning, and perhaps he was not as clear as he might have been.
In reply to a point about people who were employees of nationalised industries such as gas boards and electricity boards, my right hon. Friend said:
It is true that these pensioners have had the same increases as have been granted to public service pensioners, on the ground that many of them were formerly employees of local government bodies and, therefore, had a claim under the Pensions (Increase) Acts."—[OFFICIAL REPORT, 25th March, 1965; Vol. 709; c. 1072.]
I am glad that the hon. Member for Tynemouth (Dame Irene Ward) is here, because she was present on that occasion and interrupted the Minister to ask him whether he was aware that many employees of the gas and electricity boards were employees of private enterprise before nationalisation. The point that I want to make is that they, too, have benefited from any increases. The increases which will follow the passing of this Measure will give increases not only to those in the nationalised industries who formerly were employed by local authorities, but those who were in private enterprise as well.
That is why I regret very much, as do many of my colleagues, that the Bill does not cover a wider spectrum. It brings out a very important point. I have studied the new Post Office Bill and looked at the pension and superannuation Clauses in it. They give no indication of what is to happen, because they are enabling


Clauses. It will be interesting to see what happens when the Post Office becomes a statutory body like a nationalised industry, whether its new pension scheme will be contributory or non-contributory, and how pensions will be affected by future Pensions (Increases) Bills.
A number of hon. Members have tended to indicate that Pensions (Increases) Bills have not always given increases to pensioners in excess of the increase in the cost of living. I have taken out some figures, and they are rather interesting when one takes account of what has happened in individual cases. A Civil Service pensioner who retired on 1st January, 1951, at 60 years of age with a pension of £500 per annum, is a good example. There have been a number of increases since that time. He received £50 under the 1956 Act, which was 10 per cent. of his basic pension, increasing it to £550. Under the 1959 Act, he got 12 per cent. on his gross pension, increasing it to £616. Under the 1962 Act, he got 12 per cent. on his gross pension and, because he was then 70 years of age, he received £20 extra, bringing his total pension to £710.
Under the 1965 Act, he received another 16 per cent., which meant an increase of £114, and then his pension was £824. In other words, from 1951 to 1968, his pension increased from £500 to £824. I have made a calculation taking into account the increase in the cost of living. Comparing £824 with £500, the difference is roughly equivalent to the increase in the cost of living over that period of time.
I am fortified in my argument because, having examined the debates that have taken place in this House, it is clear that those increases which have been given over the years take into account not only increases in the cost of living, but also increases in the prosperity of the economy and the fact that retired people are entitled to this increase in benefits.
It may be, taking the man who retired in 1951, that he is getting more than those who have recently retired. This is in accordance with the desire of Members of the House generally. We want to see the older pensioner who has suffered most getting something today which is not only equivalent to increases in the cost of living, but is something more, so that he

will get the benefit of increases in the economic prosperity of the country. Those who have retired later have got some benefit by increases in salary which mean an increase in pension. Therefore, this is fair all round.
Are we being fair to those pensioners? My right hon. Friend mentioned three points, the last of which interested me. She said, "What we are doing here is being fair and maintaining a just balance to the community at large." My problem is whether we are.
For public service pensioners, in the figures that I quoted we are not only being fair; we are being generous. I do not grudge them this at all. But I look at what has happened in other sections of the community. Take the man in outside industry in a contributory pension scheme who, in 1951, retired with a pension of £500 a year. When I quoted this figure in a magazine some time ago I was criticised for using it, because many of these people retired with very much smaller sums. However, I took this figure because the calculation was easy.
In that particular private pension scheme there was an award in 1956 when this man got nothing; an award in 1961 when he got 6 per cent., £30; an award in 1963 which gave him £84; and an award in 1966 which limited any increase to £75. Therefore, that man now has a pension of £689 a year.
We have a Civil Service pensioner and a man in an outside contributory scheme. The Civil Service pensioner is, at the moment, getting £824; the other is getting £689. Therefore, I ask: are we being fair to the community? This new increase will give the Civil Service pensioner another £148, with the result that he will have £972.
The man outside to whom I am referring is a railway superannuitant. The problem is getting the British Railways Board to give him an increase. Up to the time of the new Transport Act we could go to the Government and ask them to take responsibility, because any money that had to be found for these railway superannuitants had to come from the Government, they being responsible for the deficit under which the railways were running. Therefore, any money given to these people could have come out of the deficit.
Now a new scheme of transport has been put through this House. We will be told, as we were told by the Minister this afternoon in opening the debate, that the responsibility was the Board's. I envy my hon. Friend the Member for Bristol, Central (Mr. Palmer) who can go to the Electricity Council with faith and knowledge that it will be able to do something about the problem. However, the people that I represent, railway super-annuitants, will be told by the Railways Board, quite frankly, "We do not have the money."
If we are to be fair to all sections of the community, I think that we ought to say to the Railways Board, or to the Government, that this is not good enough and somehing ought to be done about it. I hope that when my hon. Friend winds up he will be able to give some indication to the British Railways super-annuitants that they will not always be left out in the cold when these pension schemes are put through the House.

6.35 p.m.

Dame Irene Ward: First, I apologise for not being here to listen to the opening speeches from both Front Benches. I am sure that you, Mr. Speaker, are aware that there is great pressure of work on all Members of Parliament. I could not free myself in time to be here for the opening of this important debate. However, I am grateful to you for calling me now to speak.
What I am about to say will not be based on mathematical calculations, because I am not particularly good at figures, although a great many have been bandied about. However, I have for many years, as indeed have you, Mr. Speaker, followed the welfare of the people covered by the Pensions (Increase) Acts.
I wish to say a few things about what I have heard put forward this afternoon and what is in the Bill. I feel very sad that the people who today are on the lowest rates of pensions do not seem to benefit very much, because the Bill, as has been pointed out, follows the usual pattern. I can see how difficult it is, and I can see, now that at last we have the White Paper, that the Government do not want to complicate their plans for

the future. That is all very well for people either in middle age or in the first flood of retirement, but for those who have been retired many years it is no consolation to say that in future—which may be by the beginning of the next century—things will be much fairer and more just.
I believe that something ought to be done for the older people. I cannot see why this situation could not be met to a certain extent by increasing the £20 bonus, if I may so call it, that was introduced by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in the last Pensions (Increase) Act introduced by the Conservative Administration, because a great many people will now have reached the age of 70 at which this £20 was established. If that were bumped up to a reasonable figure many of the older pensioners would at least gain something more to help them with the future years.
I hope that the Parliamentary Secretary will answer a specific point. I get a bit tired in Parliament of all the generalities and the paraphernalia of indefinite points, some of them very clever, but which do not answer the points put forward by hon. Members. Why cannot we bump up that £20 for people reaching the age of 70 who are covered by the Pensions (Increase) Bill? Why cannot there be a substantial increase to help those whom the House in general is most anxious to help? If the Parliamentary Secretary will answer that and give an undertaking that the Government will investigate the matter, I shall be very glad.
I have had an opportunity to look at the White Paper only briefly and to read about the new arrangements which will start goodness knows when. There is an indication that the Government are considering having a review of pensions every two years. I am very interested in this, because many years ago I followed the lead given by the Liberal Party, which put forward a proposal to this effect. This was when a Conservative Government were in power. I voted for an Amendment which the Liberals moved; as far as I know, hon. Members of the Labour Party—who were then in opposition—also supported the Amendment.
I get very tired of politics which are not honourable and realistic. I do not mind people saying, "You cannot have this" or "This cannot be done", or, "In the context of the national economy we cannot have this, that and the other", but I hate the business of voting one way when in power and another when in opposition—following the precept of "Never the twain shall meet". It does not satisfy me that this proposal is mentioned in the White Paper because I surmise that many more "two years" will pass before its provisions are embodied in legislation.
The Government, who were then in opposition, followed the lead given by the Liberal Party in respect of a specific Amendment which is now supported by my party. It is time that my party supported it; I can say what I like about my party now because its spokesman, who made an excellent speech on the Bill, was not in the House at the time to which I am referring, so what I say cannot be taken as any criticism of him.
It is interesting to see young, active men debasing things that people like me were keen about many years ago. I hope that my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) will not mind my saying that I am pleased to know that the Conservative Party now supports my proposal. I wish that it had done so when the Liberal Party advocated it and I supported it. I always say that it takes 10 years to win a battle, but for pensioners it takes about 50 years before anything can be won, in terms of altering the general structure of the scheme.
Since the Government approved of the proposal when they were in opposition why cannot they embody it in the Bill and get it put into operation, thus relieving the anxiety of hundreds of thousands of our people whose cost of living is rising every day and who have no means of increasing their incomes to meet it?
The third question to which I want a specific answer concerns the nationalisation problem. I put down a Question to the Ministry of Transport about railway super-annuitants, in whom I have always taken a great interest. I am grateful to the hon. Member for Dunbartonshire, West (Mr. Steele) for raising the question of the new position of the Railways Board. I was thankful that I managed even to get a

Question put on the Order Paper, because it at least showed that it was in order and that there must be some Ministerial responsibility. I know that it was in the original Act, because that is the way in which we were able to argue the question, but I should like to know whether it is still in the Act.
I suppose it must still be in order to discuss the question of railway super-annuitants, or my Question would not have been allowed. Although I shall almost certainly be told that this is a matter for the Railways Board it would not be a bad idea if we had an all-party deputation—I am keen on all-party deputations—to the Chairman of the Board. If he will be frank he should be able to tell us the position concerning the railway superannuitants, and if he cannot get anything out of the Treasury the House of Commons can descend on the Treasury. I always like to idea of descending on the Treasury, because it is the nigger in the woodpile and I get furious with it.
What have the Government arranged with the Treasury about the railway superannuitants?

Mr. Speaker: Order. The hon. Lady was not here when I ruled, rather generously, that incidental references could be made to the railway superannuitants, but that the matter could not be pursued in detail.

Dame Irene Ward: I have pursued all the detail I need to, Mr. Speaker. I cannot remember whether you had reentered the Chair, Mr. Speaker, when we discussed the question of the electricity and gas employees. I had a Question on the Order Paper today about them, and the hon. Member for Bristol, Central (Mr. Palmer) made a long speech about them, during which I made an intervention. I have not yet received an answer to my Question. It takes longer and longer to obtain an answer if a Question is not reached. The House of Commons cannot be patted on the back for increased productivity, because its life gets slower and slower.
I am willing to bet that I will be told that this is a matter for the electricity and gas boards. I accept, that, but the hon. Member for Bristol, Central has put all sorts of ideas in my head. He was very knowledgeable. He said that the


Electricity Council had a great scheme. He did not go into detail, and I cannot do so because I do not know enough about it. The hon. Member said that the Council had a magnificent scheme, but that it could not obtain the agreement of the Treasury.
As a Member of Parliament, I object to having Ministers tell me that this is a matter for the nationalised boards if something is going on behind the scenes with the Ministries. I shall be very angry if the Council is prevented by the Treasury from going ahead with the scheme which it wants to bring forward I hope that we may be given a definite answer on that matter.
Those are three specific questions to which I require specific answers. I know that we cannot discuss the Royal Warrant, but I want to mention the word ''widows" because it is always useful to have things in HANSARD. I therefore mention the question of widows under the Royal Warrant. I should like to know how the Government react to their situation. Widows have had a raw deal.
One hon. Member opposite, in his eloquent speech, asked what the Conservative Party had done. I agree that my party was much too complacent and did not do what I would have liked it to do. I say that; I do not mind saying it, and I will go on saying it. But in its defence, I would point out that the difference between the Conservative Party and the Labour Party is that it is very difficult to get promises out of the Conservative Party. During all my years in the House my trouble about those living on small incomes is that I have never been able to get my party to give pledges. But the Labour Party gives all its promises and pledges during the General Election, and then we cannot get them implemented when it comes to power.
In my part of the country, since I represent not only Tynemouth but Whitley Bay, where there is an above average number of retired people, I was heavily "put through the hoop" at the last election, when I was confronted with Labour Party documents and candidates' speeches. The Officers' Pensions Society, among others, thought that it would get something out of a Labour Government.

All these people thought that the Labour Party would be far better than the complacent Conservative Party. Now, they have learned their lesson. Although I do not often agree with the Liberal Party, because I pay no attention to it, I did support its ideas on this, but it is not in a position to implement what it said at the General Election and the Labour Party is now retreating from its own election promises.
I would much rather have my party uncommitted, because it can always, with luck, twist and say, "Come on, come on". I think that my right hon. Friend the Member for Kingston-upon-Thames went a little way when he introduced that £20 bonus. It did not go far, but it was a small move forward. He was rather pleased about it, because I paid him a compliment in our debate on the Bill.
But the people who thought that a new heaven and earth would dawn in their standards when the Labour Party won the last election must be very disillusioned. I have not read the White Paper, but I know that it will take years and years, as the Government have been honest enough to say—

Mr. Speaker: Order. We cannot debate the White Paper in this debate.

Dame Irene Ward: I do not intend to, Mr. Speaker, but many hon. Members have quoted from it; although I have it here, I do not intend to do that. In any event, it will probably be 10 years before we get this scheme. In any event, we will not get it, because, by that time, the Conservatives will have won a General Election. I hope that those who support the Conservative policy will be pleased about this. The new Conservative policy will, I think, be very good indeed.
I hope that I can have specific answers to the questions which I have put to the Government.

6.55 p.m.

Mr. Stan Newens: Like many other hon. Members, I have reservations about the Bill, but it is to be welcomed if only as an overdue stop-gap measure. It is necessary at this time to recognise that it was a considerable temptation for the Government to put off an increase indefinitely, particularly in view


of the way in which hon. Members opposite had been whipping up blanket hostility to increases in public expenditure and at a time when it seems to be the conventional wisdom that never-ending cuts are the main way to solve economic problems.
I wish that right hon. and hon. Gentlemen opposite would say publicly that they consider it necessary to raise public expenditure not only in this but in other spheres, because it would be much more honest if they recognised this and told the public instead of trying to stir up opposition, which people often misunderstand.
I hasten to add that the Bill does not meet all the requirements of the situation. I regret that the operative date will not be 1st January. The public service pensioners have already waited too long. They now have a further two months to wait, and it would have been a better Bill with an earlier date.
The escalator provides for a graduated scale of increases under Part IV of the First Schedule, and it would have been much better, as the hon. Member for Burton (Mr. Jennings) said, if the escalator could have continued at 2 per cent. all the way through. Although pensioners who retired before 1st January, 1955, will get an increase of 18 per cent., had the 2 per cent. escalator been in operation throughout, they would have got even more. I have some knowledge of the position of teachers and know that many of those who have been retired the longest are in a very difficult position.
For example, had we carried the 2 per cent. increase right through for each year, a qualified assistant teacher who retired in 1946 and was entitled to full pension would have received £600 instead of the £561 which he will now receive. A head teacher in a group 3 school who retired in 1946 would have received £656 per year instead of the £615 which he will now get.
This would still be a long way from providing such a person with the pension which is received by someone retiring in an equivalent position in 1968. An assistant teacher who retired in 1968 would receive £725 and a head teacher in a group 3 school £981. There seems still to be a considerable amount of leeway, and I have a great deal of sympathy for those who retired a long time ago.

With regret, I do not think that the Bill goes far enough to bring them up to a reasonable level.
Those who retired after 1st July, 1967, will have been retired, as the hon. Member for Burton said, for almost two years by the time the Bill comes into force, which means that by not providing them with any increase we are helping to perpetuate the problem of those who have been retired longest falling way behind. In this case it is particularly regrettable that the operative date should have been put forward.
It should be pointed out that things are not necessarily cheaper for older people. They must pay the same rents, rates and food prices. Many of them are in a particularly difficult position. The new doctrine of selectivity, to which I am strongly opposed, means that those who have provided for their old age, whether privately or through pension schemes, often have their standards of living undermined by means tests. We are introducing more and more means tests with the rent rebate scheme, the rate rebate scheme, the supplementary—

Mr. Speaker: Order. The hon. Member is going a little wide of the Bill.

Mr. Newens: Many public service pensioners find it galling to see themselves being deprived, because of their pensions, of the right to certain benefits which are available to other members of the community.
I should have liked the principle of parity to be adopted, even if it could not be immediately implemented. In this respect, I take issue with both Front Benches and I hope that this problem will be carefully considered. We shall always be facing this situation until we grasp the nettle of the difficulty that people who have retired for a long time have to make do with a standard of living which is lower than that of others. I see no reason for that.
The Minister mentioned the increase of 12·3 per cent. in the cost of living since the last Act. While that increase is not as great as is the pension increase for those who retired before 1st July, 1955, if during the course of the next three years the cost of living continues to increase at a somewhat similar rate the real value of the pensions, even for those who are now to benefit most, will


soon be falling below the standard of 1965 once again.
I agree with those who have said that the present system of dealing with increases for public service pensioners is totally unsatisfactory. I was glad to hear the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) say that it was repugnant to both sides of the House to engage in a kind of auction for the votes of public service pensioners. However, I recall that last year the Opposition took advantage of a Motion, signed by the hon. Member for Burton, myself and others, to initiate a debate for narrow party political purposes. We should remove any opportunity for either party to do that in future, for both parties and politicians generally are increasingly being regarded by the public as totally insincere and totally unreliable as a result of tactics of this sort. It is high time that hon. Members refrained from indulging in such operations, and it is certainly time that the system of altering public service pensions was changed so as to prevent the opportunity in that respect.
One of the reasons why the change has not been made before is that the public service pensioners have been largely unorganised. No one would argue that people in employment should be subjected to this kind of system, but people in employment normally have organisations to represent them. The public service pensioners are now getting organised, and a great deal of good work has been done by the Public Service Pensioners Council. Although pensioners can never hope to have the same power of leverage as those in employment, unless a change in the system is made they will make a tremendous fuss. For that reason, I was delighted that my right hon. Friend mentioned that the White Paper which has been published today outlines tentative plans for reviewing the methods of determining public service pensions. I am delighted that we are now moving towards reform, although I regret that we have not done it much more rapidly.
Despite all its faults and inadequacies, I welcome the Bill. Although I still have considerable sympathy with those retired railwaymen mentioned by my hon. Friend the Member for Dunbartonshire, West

(Mr. Steele), other sections of the population will not be helped if public service pensioners do not receive the increases which they need. But the achievement of the increases should enable us to draw attention to the discrepancies which will then be created and to the need for dealing with other sections, such as the railwaymen.
The Bill has gone some way to meet the needs of the situation, but there is no room for complacency. I hope that reforms of the system as a whole will be put through at the earliest time so that this will be the last occasion when public service pensioners will have to rely on this out-dated method of meeting their just needs.

7.7. p.m.

Mr. Eric Lubbock: I can remember the hon. Member for Epping (Mr. Newens) concluding with a similar sentence his speeches on this subject in 1965 and 1966 and yet here we are doing it all over again. While I welcome the thought that this might be the last occasion, I am not as optimistic as the hon. Gentleman.
I remember the right hon. Member for Sowerby (Mr. Houghton) saying in the 1962 debate that everyone would now agree that at last it was time for a fundamental review of the machinery by which public service pensions were awarded. He hoped that before the next occasion for such a Bill arose, the Government would have given serious thought to the development of alternative methods. That was seven years ago, but the methods are still identical, although the exact form of Pensions (Increase) Bills has been modified over the years. We have had the experiment of the £20 bonus and now we have had the escalator, designed to give slightly more help to those who have retired longest.
I agree with the hon. Member for Epping that this is the whole point. This is why we have criticised the arrangements for increasing public service pensions. Everyone knows that the teacher, or policeman, or servant of a local authority, who retired many years ago is far worse off than the person who has done exactly the same job but who retired yesterday. The hon. Member for Dunbartonshire, West (Mr. Steele) was not quite right to say that we were being


too generous to public service pensioners with Bills like this in comparison with railway superannuitants. He should have said that in a civilised society pension arrangements for people in the nationalised industries or in commercial employment should be raised to the standards at which we are aiming for public service pensioners.
I would have pointed out to the hon. Gentleman, if he had still been here, that the occupational pensioner in private employment can normally expect to obtain two-thirds of his final salary, whereas the civil servant, who has, in effect, paid for his pension throughout his working life, because his salary takes into account the amount of the benefit he receives in comparison with an outside occupation where there is a private scheme, receives only 40/80ths of his terminal salary as a maximum. Therefore, many people in private occupational schemes are much better off immediately after they retire, even if they do not have the prospect of increases later.
The hon. Member for Epping is absolutely right to say that the only way to cope with the problem of the decreasing value of the pension is by introducing parity, and I am sorry that neither the Government nor the Official Opposition have yet seen the light on this. I dare say that if they took a sounding of backbench opinion they would find that the majority of hon. Members were in favour of the public service pensioners' case, like the hon. Member for Tynemouth (Dame Irene Ward), who has fought for parity over many years, the hon. Gentleman, and many others I can think of who would not accept any lesser solution, however it may be wrapped up by the right hon. Lady in the review she has outlined in connection with the White Paper published today.
Everybody pretends that the Bill is generous. As I said to the right hon. Lady during her opening speech, let us look at the change in the value of money since 1st January, 1966, when the last Act came into effect, and make a comparison with the equivalent figures for the period between 1962 and 1965. As she rightly said, the latest figures available from the Ministry of Labour show a 12·3 per cent. increase in the cost of living since the coming into force of the 1965 Act. I have worked out that if

inflation continues at the same rate it will have increased by 13·7 per cent. by 1st April, when the Bill comes into operation, which, I think, is an all-time record since Pensions (Increase) Bills were first used as a means of adjusting public service pensions. At any rate, during the past three interim periods the increases have been 7 per cent., 8·4 per cent. and 11 per cent., so they are gradually going up.
We must look not at the period that has elapsed since the last Pensions (Increase) Bill, but at the size of the change in the cost of living over that period. That is why it is important to underline this factor in considering whether the amounts provided for in the Bill are large enough. It is true that they are marginally higher than was the case under the 1965 Act. But the table in Schedule 1 shows that all those who retired after 1st July, 1959, are receiving less as a percentage increase than the rise of 13·7 per cent. in the cost of living, and will therefore find themselves worse off in real terms than they were three years ago, immediately after the 1965 Act came into force.
The right hon. Lady said that we could expect a lower rate of increase in the cost of living between now and April than we have experienced over the past three years, because, she added, the effects of devaluation had worked themselves through the economy and we were reaching a period of more stable prices. I do not believe that. I should like her to look at the cost-of-living index between November and December, which was the largest since devaluation. If anything the cost of living is rising ever more rapidly.
We read of increases in every sector, the latest being the proposal of British Railways to surcharge those who travel on peak-hour trains. Big increases in prices are a daily news item; in fact, they are practically not a news item any more. My approach to the subject of increases in the cost of living between now and April is probably conservative. It may well be that on 1st April we shall find that the increase is not 13·7 per cent. since the last Act came into force, but something even larger.
I mentioned that people who retired after 1st July, 1959, will not derive any benefit in real terms as compared with what they received on 1st January, 1966.


Those who retired in earlier years will be slightly better off, but not by as much as the right hon. Lady gave the impression that they would be. If my figure of 13·7 per cent. is correct, the maximum amount by which anyone can benefit in real terms is 4·3 per cent., which is the difference between the 18 per cent. maximum in the Schedule and the 1·7 per cent. change in the cost of living. I hope that the right hon. Lady has been able to follow my arithmeic.
We must also remember that those people who will in effect receive 4·3 per cent. in real terms started off from a much lower base, and that the working population has enjoyed a much larger real increase in its income than 4 per cent. over this period. The result is that the pensioners to whom I am referring are still continuing to lose ground in relation to the rest of the community, for all the pious phrases we hear about enabling them to share in the generally increasing standard of living of the people as a whole. I do not think that this could by any means be described as a very ample margin, which was the phrase the right hon. Lady used.
I did not think that her examples were very impressive. I took one of them down, and I should like to run through it, at the risk of being tedious, because it illustrates my point very well. When I am taking the right hon. Lady's example and not producing one of my own the House can be certain that I could have picked out an example that would have supported my case much better, and that she would not choose one that would help me in my argument.
According to the right hon. Lady, a constable who retired in 1958 after 30 years' service would have received £440 starting pension. She said triumphantly that he would now get £609, an increase of 38 per cent. since he retired. Then, as the coup de grâce to anyone who might be disposed to disagree with her, she said that the increase in the cost of living over the equivalent period had been only 37 per cent., so that, if I took down the figures correctly, such a policeman would now be 1 per cent. better off in real terms than he was at the date of his retirement in 1958.

Mrs. Hart: The hon. Gentleman is being a little unfair. I gave three

examples, taken down the scale from the top to the bottom, to give an absolutely objective picture of the effect of the Bill. The hon. Gentleman is choosing one. I gave two others which gave a very different picture. I was not trying to present a picture that would in any degree give a false impression of what the Bill would do, so he should at least withdraw his remark that I was selecting examples which supported my case. I was trying to give an objective case.

Mr. Lubbock: I think that the right hon. Lady can make that point herself. Is she disagreeing with the figures? Have I got them down wrongly? Was the increase in the constable's pension 38 per cent. while the cost of living increased by 37 per cent. over the same period?

Mrs. Hart: Yes. That is exactly what I said, but I also quoted two other examples, one of a person who had an increase of 72 per cent. compared with the increase in the cost of living of 59 per cent., and the other of a higher executive officer who had an increase of 68 per cent. compared with the cost of living increase. I gave three examples right down the scale.

Mr. Lubbock: Very well. So the right hon. Lady is saying that the higher executive officer has achieved some improvement in his real standard of living over this period. I feel sure that there are a lot more constables than higher executive officers. Perhaps we should have tables showing the whole spectrum of public service pensioners. I should be interested if the right hon. Lady could set out not only the three examples which she gave, but the equivalent for a teacher, for instance, or a clerical officer.

Mrs. Hart: Forgive me. One of the examples I gave was the clerical officer.

Mr. Lubbock: Unfortunately, I do not write shorthand and I was able to take down only one example. I am sorry if the one I happened to choose was the least favourable to the right hon. Lady's case. It was purely coincidental. Although I was scribbling hard, I could not manage to take down details of the higher executive officer's case.
To conclude a consideration of the policeman's case—if I shall not upset the right hon. Lady too much—presumably,


the figure of 37 per cent. is the increase in the cost of living between the date of his retirement and the latest figures, which came out in December, so the right hon. Lady is not taking into account what I regard as the inevitable further increase in the cost of living between now and 1st April next. Therefore, this policeman will not be 1 per cent. better off in real terms. He will be literally worse off in purchasing power than he was at the time when he retired in 1958.
Moreover, he will continue to receive £609 for at least three years after 1st April, if one is to go by previous experience, and during that time the relentless march of inflation will continue, so that, inevitably, he will be worse off during those three years than he was immediately after his retirement. He will not have the 3½ per cent. norm which the Secretary of State for Employment and Productivity applies to the working population. He will probably find his standard of living declining by 3½ per cent. a year.
I do not wish to weary the House with quotations going back to 1964, but, having mentioned the right hon. Lady the Secretary of State for Employment and Productivity, I should like to remind the House, in passing, of the letter which she wrote to the Tunbridge Wells group of the Civil Service Pensioners' Alliance prior to the General Election in 1964. The right hon. Lady now holds high office in the Government. It is interesting to consider the way in which Ministers' views have changed since their assumption of office. Here is what the right hon. Lady said:
Our policy is to relate the pensions of those in retirement to the level of pensions currently granted for comparable grades and length of service, and a Labour Government would move as quickly as possible to this end. I hope that this reassurance will set your mind at rest.
I suppose that it did. Probably, many people in the Tunbridge Wells group of the Civil Service Pensioners' Alliance voted Labour on the basis of that letter.
I was interested to hear the right hon. Gentleman the Member for Sowerby tell us today that he drafted the famous letter which the Prime Minister sent to a member of the Civil Service Pensioners' Alliance. It has been quoted so often in our debates that I shall not weary

the House by repeating it again. Clearly, the right hon. Member for Sowerby and the Secretary of State for Employment and Productivity, to say nothing of the hon. and learned Member for Northampton (Mr. Paget), all thought that this was the Labour Party's policy before 1964, and they, presumably, had good reason for so thinking. There have been remarkable changes in their thinking since.
The right hon. Lady tells us that, after four years of hard work, the White Paper has been produced and we must consider our attitude to public service pensions in the future in the light of the arrangements to be made for State retirement benefits. I agree that it would probably be unwise to consider these matters in isolation, but I think it unsatisfactory that, after those four years of work, the right hon. Lady should now produce a scheme which deals with ordinary retirement benefits without at the same time giving attention to the question of public service pensions, save that she has come to the definite conclusion—if I understood her aright—that parity would not fit in with a State scheme of this kind.
The only objection the right hon. Lady mentioned was that difficulties would arise from changes in the grades of civil servants and others who might be affected by the principle of parity. That is a fairly easy problem to overcome. All one has to say is that, where a particular grade has disappeared, the parity will be measured by taking into account a group of employees instead of the one single occupation. In this way, one could, perhaps, take the point which was made by the right hon. Member for Sowerby, who seemed to suggest that, instead of relating the pensions of public service pensioners to the level currently operating for a certain grade, one should average them out over a much wider field.
Obviously, we cannot go in detail into the implications of the White Paper. Apart from questions of order, there has not been time to study it. However, I notice that it is the intention of the State scheme that adjustments should be made—this is paragraph 33—
not only for changes in price levels but also for changes in general living standards.
It seems, therefore, that there will be at least an element of parity in the State scheme.
In paragraph 101 the idea of the biennial review is raised. This would deal with the point made by the hon. Lady the Member for Tynemouth, in her excellent speech. I was grateful to her for reminding the House of the work done by our old friend Donald Wade, now Lord Wade, who first introduced the suggestion by an Amendment proposed to the 1962 Bill, although the then Chief Secretary to the Treasury, the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said:
I do not find this proposal at all attractive ".—[OFFICIAL REPORT, 20th November. 1962; Vol. 667, c. 1159.]
The Conservative Party has changed its mind and has come round to our way of thinking, as it sometimes does. Although the hon. Lady was right to say that, when Liberals put things in their election manifestos, readers will know that we may not be in a position—or we were not after the 1964 election—to implement those pledges, it is striking on how many occasions our thinking has an effect on the formation of policy of another party so that ultimately it is put into effect, even though not by members of my party—at least until now.
What my noble Friend did in 1962 was of considerable importance, and I am glad that the Conservative Party has now come round to thinking that, if one could have regular biennial reviews instead of leaving the question to the whim of the Government of the day, we could, as the hon. Member for Epping put it, begin to take some of the politics out of the question of determining public service pensions.
I am rather worried to read in paragraph 101, however, that the biennial review would not necessarily take into account all changes in the levels of earnings which have taken place since the last increase. The sentence is:
The actual amount of improvement on each occasion, beyond the inflation-proofing, must be left for decision by the Government of the day, which will need to take into account such factors as movements in earnings levels, changes in the standard of living of the community as a whole, and the general economic situation.
If ultimately the Government decide how much to award, why have this biennial review at all?
There are still to be no fixed rules by which the pensioner will be able to calculate his entitlement to an increase at the end of the two-year period. Therefore, we will not entirely eliminate the sort of political battle that leads up to every Pensions (Increase) Measure or has done in respect of every such Measure since I first came to the House. During such periods the various pensioners' associations write letters of complaint to hon. Members, visit Ministers in deputations, we have Supply day debates and, finally, after a long period, the Government introduce a Bill which one supposes must to some extent have been influenced by the representations which they have received. Will not the same thing happen, with the exception that the biennial review will be only a further stage in this process?

Mrs. Hart: It may help the House if I clear up this question of the biennial review as it is expressed in paragraph 101 of the White Paper. It means that the existing generation of pensioners will no longer have to apply pressure on the Government of the day and on political parties and hon. Members to persuade the Government that the time has come when a further increase should be awarded. They will now be assured that every two years—following, of course, the introduction of special cost-of-living indices for pensioners, about which the House already knows—there will be a biennial review which takes full account of, and completely compensates them for, any changes that have taken place in price levels during that two-year period.
Beyond that—and this is a matter in which there must be a certain flexibility—it must still be for the Government to decide how far the increase should not only take into account changes in price levels, but other factors, and this must be in relation to the general economic position at the time. It means, therefore, that a great deal of the matter will be taken out of politics, and this is important for the present generation of pensioners.

Mr. Lubbock: I am grateful to the right hon. Lady for that explanation. What she described will undoubtedly be an improvement on the present situation, because the lobbying and politics will


be taken out of the timing of these increases. Nevertheless, they will not necessarily be taken out of the amount involved, because we will still have an area for argument about, for example, the extent to which pensioners should be compensated above the amounts which are necessary to counter the effects of inflation and whether they should go all the way to meet the changes in earning levels of the working population since the last bienniel review took place. I agree that this will be an improvement and will take quite a lot of the argument out of politics and into the formal machinery, and that this will be an improvement.
It is interesting to note that paragraph 148 says:
… a joint committee has already been set up to review the whole basis of superannuation—
This is in the Civil Service—
with representatives of management and staff, including the industrial trade unions concerned. The implications of the new State scheme will be taken fully into account in the course of this review.
What terms of reference have been given to this committee? Do its members have guidelines on which to work or are their terms of reference as vague as those set out in the White Paper? If I were a member of this committee and I were told, "You must design a new scheme for the superannuation of civil servants and take into account what is said in the White Paper", I would describe that as vague.
What sort of scheme are the Government aiming at? The Minister will recognise that she and her colleagues must decide the type of superannuation scheme at which they are aiming in broad terms and so enable the committee to work out the details. Merely to provide something as sketchy as paragraph 148 is unsatisfactory. No doubt the right hon. Lady has tried to keep the White Paper as short as possible. Presumably she was not able to set out the full terms of reference of the committee, but the House should be informed in the near future exactly what the committee is being asked to do.

Mrs. Hart: Mrs. Hart rose—

Mr. Speaker: Order. We cannot debate the White Paper in detail. We are discussing a Measure which is concerned with public service pensioners.

Mr. Lubbock: Perhaps the Minister will explain the position on another occasion.
It seems that after four years, during which the comprehensive social security review has been proceeding, this Measure represents a rather small mouse. We were promised that public service pensioners would, at the end of the review, have all their difficulties solved. Although the right hon. Lady has managed in the White Paper to deal with the State scheme, we appear otherwise merely to have been told about a committee which has been established. When public service pensioners have digested the White Paper they will, unless there is something important in it which I have not spotted, be extremely disappointed at this aspect of the matter.
They will, of course, be pleased about the Bill on the principle that half a loaf is better than no bread at all. They will also be pleased with the principle of the biennial review, but they are bound to be unhappy, following the rosy promises that were made by the Labour Party prior to the last General Election, that all that they have is the committee to which I referred.

7.36 p.m.

Mr. A. H. Macdonald: I see no reason why the hon. Member for Orpington (Mr. Lubbock) should not criticise the Bill, if he feels inclined to do so. It was, however, a trifle ingenuous of him to have selected only one example to support his argument. It was not surprising that when we examined it we found that it was an example unfavourable to the Bill and favourable to his course of action.
I could not agree with much of what the hon. Gentleman said because I am still not entirely convinced about the merits of the principle of parity. However, he made a just point when he remarked that many private pension schemes are significantly superior to public service pension schemes. I hope that my right hon. Friend has borne that in mind; and I shall return to this matter later.
I am at something of a disadvantage because I have noted with admiration that almost all hon. Members have found themselves able to listen to the debate and make notes of the salient points and,


at the same time, read the White Paper which has just been published and quote appositely from it. I am unable to perform that feat. You will be glad to learn, Mr. Speaker, that I shall not discuss the White Paper, much as I would like to do so.
From the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) and from my right hon. Friend the Member for Sowerby (Mr. Houghton), who seemed to know the White Paper by heart, we had some interesting remarks, and I hope that when we come to debate the document there will be ample opportunity—perhaps it will be a two-day debate—to enlarge on the interesting thoughts which were set out in their speeches.
I will confine myself to the Bill. The hon. Member for Wanstead and Woodford felt a little inhibited from criticising the Measure in full strength because he did not want to give the appearance of party political opposition to the Bill. I hope to be around when he does not feel inhibited and feels disposed to do a hatchet job on the Measure, because to me the Bill is something of a disappointment.
Since I was elected to Parliament the House has debated the subject of public services pensions on three occasions, and I have been privileged to catch your, eye, Mr. Speaker, in all three debates. Those three debates were introduced with suggestions that a review body should be set up. I understand why Private Members' Bills take that form, but I felt disposed to oppose such suggestions, arguing consistently I hope, that a periodic series of reviews of the level of public service pensions is in no way superior to a periodic series of Acts. I argued that there should be one permanent Act to deal with this problem once and for all, as many others have argued.
This Bill represents something of a lost opportunity. It is a commonplace that many of us argue that the level of pension, when originally granted, represents the value thought to be appropriate, and that the £ s. d. in which it is expressed at that time are fortuitous. It is being expressed in £ s. d., but the actual denominations are really the amounts which denote the value of the pension at that time. Many of us have

said that as the cost of living rises there should be appropriate increments to restore the pension to its original value. That seems to be the first fault in the Bill because it is called a Pensions (Increase) Bill. Yet at any rate a part of the nominal increase set out is not an increase in real terms but a restoration of the pensions to the value at which they stood when originally granted.
I acknowledge that my right hon. Friend endeavoured to indicate during her speech how much of the nominal increases were real and how much were merely restorative. Unfortunately, that was just at the moment when we had those rather tiresome interruptions from the hon. Member for Orpington, and I found myself unable to follow the thread of what was being advanced. I shall have to read that in HANSARD.
It is a fact that we do not have, as many of us had hoped to see, some automatic procedure for dealing with this problem continually. We are seeing now one more in the series of Measures; we are back to the same old routine. It is not really significantly different from the £20 tinkering measures advocated by the hon. Member for Tynemouth (Dame Irene Ward).
In the Explanatory Memorandum to the Bill the first sentence refers to Pensions (Increase) Acts 1920, 1924, 1944, 1947, 1952, 1954, 1956, 1959, 1962 and 1965. I wonder whether the Government, in drafting that, did not have some dim faint feeling that this series of Acts is something less than satisfactory. I submit that such a series is, as well as being unfortunate for the pensioners, unfortunate constitutionally. As I understand an Act, it is, or should be, something of general application. This series of Measures, including this Bill if it becomes law, will not be law in that sense at all. They are merely administrative actions, fortuitously couched in the form of a law.
I cannot think that these Acts are the general statements that I conceive a law to be. It is hardly surprising that this difference exists, because other Acts which I regard as being real law deal with the general body of citizens. These Measures do not. In a sense these Measures deal not with citizens at all but with our ex-employees. It is, therefore, not surprising that we should have


a different approach to this matter. I regret that we have not taken the opportunity to introduce one culminating Act which might lay down, once and for all, some formula for dealing with the problem of pensioners which comes before us so often—a formula either linking the value of pensions with the cost of living or introducing the concept of parity.
I should have preferred a Measure linking the pensions with the cost of living, despite what my right hon. Friend the Member for Sowerby said, and despite the arguments which we have just heard. My right hon. Friend certainly introduced some interesting arguments. I do not quite see why pensions as a whole should necessarily be linked to wages and salaries, because that would mean that the level of pensions might to some extent depend upon the success of the pensioners' successors in securing wage or salary increases. That is perhaps a rather chancy process. For that reason I should have preferred to see a Measure linking pensions with the cost of living.
I heartily agree about the administrative snags over the concept of parity, introduced by the Paymaster-General. If she had stopped there I should have had no criticism to make, but she went on to advance other arguments against the concept of parity which rather alarmed me. She said that the introduction of a concept of parity would mean a high privilege for ex-public servants. I am not sure that that is true, bearing in mind the remarks I have quoted earlier by the hon. Member for Orpington, but even if it is true what is so dreadful about that? Why should the Government not set a lead in this? Is it really to be supposed that we cannot even consider some automatic proposal to keep pensions level with the cost of living? Is it conceivable that we cannot consider such a proposal for public servants until something of this nature has been carried out in private pension schemes? Surely not.
My right hon. Friend went on to advance further arguments, and at that point I confess that either her thinking or my listening became extremely muddled, because it seemed to me that she was arguing that the concept of parity was very difficult to introduce because of the graduated pension schemes which existed some time ago. I will check this up in HANSARD to see whether

she did say that, but if this is so, it seems to march very curiously indeed with today's White Paper.
I cannot see why we should not introduce a Measure linking pensions with the cost of living. I accept the administrative arguments against parity. There would not necessarily be any difficulty about retaining control over public expenditure if we did that, because it would be perfectly plain that this House had to satisfy itself that the formula laid down in the Act was being observed. This is what I should like to see. These are the arguments which led me to hope that this Bill would be a culminating Bill. I was not alone in thinking that. In a debate almost exactly a year ago these words were spoken:
What we really need is a system, as opposed to hand-to-mouth methods, of increasing funds from time to time, when the Government sees the effects of erosion on the pension …. What is fundamentally wrong … about the present system … is that it is a hand-to-mouth system. It does not provide any organised systematic basis upon which any Government determines what alterations in our pensions should occur."—[OFFICIAL REPORT, 26th January, 1968; Vol. 757, c. 792.]
They are very wise words, and naturally so, because they came from the lips of the Financial Secretary to the Treasury. I see no reason to dissent from that view. I agreed with it then, and I agree with it now.
All those who agreed with those words must have felt a great sinking of the heart when the Bill came forward on the same lines as previous Bills. When I saw the Bill, I guessed that the White Paper, so long promised and so long awaited, which was to be the solution to these pension difficulties, among other things, would not introduce a principle of this kind, despite the hints and half promises which had led us to expect that it would. Although I have not been able to read it, I have at least looked at its first page and have some reason for thinking that my fears are justified and that it does not introduce the system I had hoped to see.
Though in a sense I am delighted to see the proposals which are in the Bill, it is a source of some regret to me that the opportunity has not been taken, as so many of us thought it would be, to introduce a Bill that, as my hon. Friend the Member for Epping (Mr. Newens) said, would take so much of this question


out of the realms of argument and politics and introduce an automatic system which would deal with it equitably and permanently.

7.51 p.m.

Mr. Charles Mapp: The first of the only two points that I wish to make has figured in every speech which has been made. It is the question of a review. I listened with great care to the intervention my right hon. Friend the Minister made a little earlier. Regardless of the issue of the White Paper, I wish to see an end to the public disgrace which occurs every two or three years, no matter which party is in power, of great numbers of complaints being made by well-meaning organisations and people outside the House.
It so happens that the White Paper has been issued today. Paragraphs 100 to 103 do not talk about reviews of occupational pensions, which is what we are now talking about. We delude ourselves if we think that occupational pensions will necessarily be reviewed in two years' time. A more careful study of paragraphs 100 to 103 shows that the review which will take place in 1971 and 1972 will be wholly confined to what might be called the State pension scheme. The Minister was careful not to give a firm undertaking that this occupational pension would be the subject of a review in two years' time.
As I have understood it, the sense of the House today is to note the long-term policy outlined in the White Paper and to give effect to it even in this Bill. I myself would like it to be done in any case, regardless of the White Paper. If there is such a large measure of good will on all sides, there is room for a new Clause in the Bill. By all our arguments, are we not committed to the principle of a new Clause providing that arising out of this Bill when enacted there will be an automatic review in the spring of 1971? That would be a means of ending the lobbying which has gone on for far too long.
I shall be agreeably surprised if the Government Front Bench is able to meet this point in the way that I believe it should honourably be met. If there is evasion, as I expect there will be, it will be to unhinge this occupational scheme from the national scheme and we shall

be out on a limb, just as we have been for 15 to 20 years. Both sides of the House should make a careful study of the words which have been used and seek to ensure that the Bill is improved by the addition of a Clause imposing a legislative duty to carry out a review in two years from 1st April next. Then the legislation can be carried through in the September of that year.
My hon. Friend the Member for Dunbartonshire, West (Mr. Steele) called attention to the inequalities affecting the taxpayer, who will be called upon—rightly in my view—to foot the bill to the tune of £20 million in terms of taxes and to the tune of £7 million in terms of rates, to say nothing of the cost for the Armed Forces later. Within that group of taxpayers and ratepayers are a large number of people who were in excepted employment up to 1947 and, consequently were not able with full rights to qualify under the Act of that year. Their statutory superannuation schemes have more than the weaknesses and more that the poverty of the Government occupational schemes.
Some of those people were former employees of industries, now generally nationalised, which are fortunately, in the main, profitable. By the very nature of things, the railway element is far from being profitable in any circumstances. Having a little knowledge of transport, I would not like to say that next year it can or will be viable.
I would like the Paymaster-General to tell the Ministers of Transport and of Power that this is a burden which the taxpayers are willing to bear, including the later consequences of it in respect of this public service. There is an equally strong obligation, morally and materially, to other people to whom this argument applies, except that they had the historical difficulty that they just did not happen to be in local government, although in many ways they perhaps rendered greater public service than local government officers.
One small part of the Bill intrigues me. I still await the reply of the Minister on this. Schedule 1, Part III, paragraph 1, says:
A pension payable by the trustees of a trustee savings bank or by the Inspection Committee of Trustees savings banks.


The subsequent items, paragraph 2, on the face of them, will in one form or another fall on Government account, but I should not have thought at first glance that there was a case for putting Clause I—the Savings Bank people—on Government funds. If there is a case, well and good. If there is not a case, clearly the Bill can be open to amendment for other staffs who qualify in precisely the same way.
I hope that my two major points have got home. One is that, if our protestations and arguments about a review are worth what we have been talking about, the Bill is worth amending to that effect. Secondly, I would like the Minister to ensure that the principles of the Bill find their reflection in the other areas of which I have spoken and that negotiations will be initiated on those lines as soon as possible.

8.0 p.m.

Mr. Peter Hordern: Many right hon. and hon. Members who have taken part in the debate must have felt that they have been here before. The hon. Member for Dunbartonshire, West (Mr. Steele), the right hon. Member for Sowerby (Mr. Houghton) and my hon. Friends the Members for Burton-onTrent (Mr. Jennings) and Tynemouth (Dame Irene Ward) have debated Bills like this for many years past. I know that they will forgive me if I say that some of the ground which they have covered this afternoon appeared to me to be familiar to anyone who has followed those debates.
A point which the hon. Member for Oldham, East (Mr. Mapp) has raised in his remarks and which seems to me to be important is the question of the two-year review. The point was made by my hon. Friend the Member for Tynemouth and by many other hon. Members during the debate that what was required was a regular review. It is well known that a part of Conservative Party policy is to have a biennial review. We want to know whether this is now accepted by the Government for public service pensioners. If it is so accepted, why is it not framed within the Bill? That is what we want to know at the outset.
The right hon. Member for Sowerby also asked as he has done these many

years past, when we would get a fundamental review of the entire range of public service pensions. I regret to say that I do not think any answer has been presented by the Government even now.
The right hon. Member also said that, without accepting parity, he thought that the movement of wages and salaries would make a better index than the price index. The right hon. Gentleman did not elaborate that proposal sufficiently for us to be able to judge clearly what he meant by it, but it seems to me to be closely akin to the idea of parity. The right hon. Gentleman has not, uniquely, on this occasion referred to parity. He sailed close to the wind on this matter in previous debates and I only wish that he could have told the House precisely what he meant on this occasion.
This is the eighth Pensions (Increase) Bill to be introduced since the war. It is also the most expensive. I wish that that could mean that it was also the most generous in attempting to introduce a new principle into the calculation of pensions. The truth is, however, that the cost of living has increased so rapidly under the present Government that it has already risen by 12·3 per cent. since the 1965 Act came into force. This is certainly the largest increase experienced in the intervals between any of the Acts since 1956.
Therefore, the cost of the Bill—£27 million—is due more to the fundamental incompetence of the Government than to any spirit of generosity or determination to import a new principle of relief for these hard-pressed pensioners. In this way, it stands in some contrast—I will not say marked contrast—to the previous Bills introduced by former Conservative Governments.
I hasten to say that I do not mean that previous Acts of the Conservative Administration were unnecessarily generous, or that there is not still a long way to go. Indeed, the remarks made by my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin), at the beginning of the debate, show that we consider that there is still a long way to go. Our attitude to the Bill must, however, be influenced by the kind of progress that we have experienced since the war. It may have been slow, but it was certainly progressive.
One cannot fail to notice that the debates in which Mr. Speaker played such an important part, during the post-war years, were uncontroversial. The right hon. Member for Sowerby was nearly always warm in his praise; as was the then Mr. Glenvil Hall. Their tributes were well deserved. When, however, one looks at the fate of public service pensioners in the late 1940s, it is like looking at a dark age centuries ago and not simply 30 years ago.
The 1954 White Paper, for example, referred to the old attitude to public service pensions that the fundamental principle was that, once awarded, they were not normally subject to change in either direction and that that principle had been upheld by successive Governments. There could hardly be a more stiff-necked attitude than that, and yet many hon. Members will remember the pre-war years, when there was a distinct possibility of wages going down, not up, and there was a similar threat to pensions.
In the 1956 Act, the means test was abolished and further increases of from 2 to 12 per cent. right up the scale were granted with a maximum of £100. In the 1959 Act, increases were calculated on the annual current pension instead of the basic pension as originally awarded, and the £100 limit was removed. In the 1962 Act, about a quarter of a million people over the age of 70 also received an additional flat increase of up to £20 and the pensions of 10,000 overseas pensioners were brought into line with home pensions.
All improvements are relative and I accept that the pre-1954 attitude was intolerable. Indeed, some of those improvements brought their own problems upon them. One of them—I swear that it was invented by the right hon. Member for Sowerby—was known as overtopping, which I recognise on the golf course, at least, but not at first in connection with pensions. Overtopping is still with us and seems likely to remain as long as these Bills are presented in their present form.
Surely, the most encouraging change was the 1962 proposal to pay an additional flat increase of up to £20 for those over 70 years of age. My hon. Friend the Member for Tynemouth particularly

mentioned this in her speech. It went beyond the normal cost-of-living increases. It seemed to be a quite arbitrary figure and, in this respect, it was the most significant increase yet for public service pensioners. They have, of course, even more reason to be encouraged by the promises made by the party opposite before the 1964 election and, in particular, by the pledges for full parity made by the hon. and learned Member for Northampton (Mr. Paget) at the Dispatch Box. He has told us that he was authorised to do so by the National Executive of the Labour Party.
What about the Chairman of the Officers' Labour Party in a letter to the Chairman of the Officers' Pension Society just before the election on 14th September, 1964:
You will know "—
he said—
that we are favourably disposed towards the principle of parity and that we would open negotiations with interested bodies to see how reforms along these lines can be introduced.
What kind of negotiations have taken place? They must have been scintillating. Nearly five years later, there has been no progress whatever towards parity, and service pensioners, like the rest of the country, are under no illusions about the kind of Government we have.
What about the general review? There has been virtually no progress on this front since the party opposite came into office. When the 1965 Bill was introduced by the Chief Secretary, we were told that it was essentially a holding Bill. There is certainly nobody better than "Stonewall Jack" to put that line forward. The right hon. Gentleman started by referring to the prices and incomes policy as a means of containing inflation and said that it was:
being vigorously pursued by my right hon. Friend the First Secretary of State. Many Governments have paid lip-service to the fight against inflation, but the efforts of my right hon. Friend give us a real new chance to achieve price stability—and success will bring incalculable benefits to everyone in this country".
The right hon. Gentleman went on:
The second answer relates to the radical review of the social security system which is being carried out by my right hon. Friend the Chancellor of the Duchy of Lancaster


the right hon. Member for Sowerby.
This, when complete, will provide us for the first time with a rational framework within which we can build a constructive pensions policy in both the public and private sectors … This Bill, however "—
he was referring to the 1965 Bill—
is essentially a holding Measure awaiting the outcome of the fundamental review of social security."—[OFFICIAL REPORT, 18th November, 1965; Vol. 720, c. 1353–4.]
Today, we have had published the result of that fundamental review. Paragraph 148 of the White Paper reads:
In the Civil Service, following the recommendations on various pension questions by the Committee under the chairmanship of Lord Fulton a joint committee has already been set up to review the whole basis of superannuation, with representatives of management and staff, including the industrial trade unions concerned.
I do not call setting up yet another Committee a result of a fundamental review. Three years later we are presented with another holding operation, but this time by the Paymaster-General, the chief censor of Cabinet speeches. How very suitable. No more pledges from her, no special help for the over-seventies—just a censorship operation.
The Government's neglect of these pensioners in the light of their pledges and what they said about the last Bill in 1965 has been quite shameful. This Bill makes no special provision for the older pensioners or those on the smallest pensions. No increase is payable until the pensioner reaches the age of 60, and yet there are many people, such as policemen, firemen and those in the Services, who retire earlier.
Perhaps the most important and significant of all the omissions from the Bill is that there is no provision, so far as one can tell, for regular reviews. The hon. Member for Oldham, East raised this point. In the debate on a similar Bill almost 10 years ago Mr. Glevil Hall said:
… what is wanted … is legislation to provide machinery for a periodic and automatic review of pension rates in the light of the cost of living as it changes."—[OFFICIAL REPORT, 2nd June, 1959; Vol. 606, c. 47.]
After four years of this Government, no such arrangements have been made.
We have made it clear that when we are returned to office we shall review the position every two years. We shall

reduce to 55 the age at which increased pensions become payable. We shall bring the pensions of those who retired before 1956 up to the same level as if they had retired then with appropriate increases since. These were the pledges we gave before the last election, and we stick to them now.
The reason we have chosen 1956 is that the various Pensions (Increase) Acts have more or less covered the cost of living until now, although not evenly over the field. For example, if we take the case of a man who retired on 1st May, 1964—that is the cut-off period—he would have no increase payable until 1st April, 1969, when he will have an 8 per cent. increase. Meanwhile, the cost of living has risen by 21 per cent. to December, 1968. The hon. Member for Orpington (Mr. Lubbock), carrying that progression forward, said that by 1st April the amount would probably be 13·7 per cent.
That brings us back to the argument for complete parity. Speaking for myself alone—and I emphasise that—I have never been impressed by all the arguments against parity. The fact that higher salaries must be paid in the Civil Service is a reflection of inflation, and the Government are responsible for that. It is true that N.A.T.O. countries give their public servants parity. Even though they do not have a National Insurance retirement pension as well, that is not strictly comparable because it is a contributory scheme, and, in any case, the point of these Bills is specifically to provide against inflation, and the National Insurance bill should not enter into the argument.
The major difficulty about full parity is the cost, which is about £100 million, and I cannot see how we can afford this sum in a single Bill. But what we propose to do is to raise all the older pensions to the 1956 level. Looking back at earlier debates, I have seen too many irrefutable Treasury arguments, such as those concerning overseas pensioners, turned on their head, and I hope that they will be again.
There has been no general review of public service pensions since 1859, when Mr. Gladstone was Chancellor of the Exchequer. It is time we had another. The need for a review has been demonstrated by the Fulton Report on the Civil


Service. The Paymaster-General should have told us what she thought about the Fulton's Committee's proposals and what she intended to do about them, but she said nothing on that subject. Therefore, I trust that the Parliamentary Secretary will tell us what the position is about the review.
The Fulton Report proposed greater mobility into and out of the Civil Service and recommended that important changes should be made in the Services' pension arrangements. The first of these was the extension of the scheme to cover temporary staff. The definition of "temporary staff" is those staff not taken on establishment. There are apparently 124,000 temporary civil servants, and it is possible to reach the age of 59 with 19 years' service and still not be entitled to a pension. I realise that everything in life is temporary, but I think that that carries the principle too far. Pensions for temporary civil servants and for re-engaged staff have been a recurring feature of these debates, and we should be told the Government's position.
There is the question of transferability of pension rights. Pensions can be transferred within the public sector, but not from the public to the private sector. So far as I can see, the preservation of pension rights forms no part of the new earnings-related National Insurance scheme.

Mrs. Hart: Yes, it does.

Mr. Hordern: I am grateful.
Paragraph 158 of the White Paper reads:
While the Government hope to see a continuing spread of transfer arrangements, they have concluded that it is not at present possible to achieve universal transferability of occupational pension rights.

Mrs. Hart: I appreciate that the hon. Gentleman has not had time to read the White Paper fully, but there is a considerable section on the preservation of pension rights.

Mr. Hordern: May I take it that there is to be transferability—

Mr. Patrick Jenkin: No—preservation.

Mr. Hordern: —preservation of pension rights? What action, if any, do the Government propose to take on the proposal

of the Fulton Committee to reduce the qualifying period of the pension from 10 to five years?
I turn to the question of contributory pensions. Although the Tomlin Commission recommended 40 years ago that Civil Service pensions should be contributory, they remain non-contributory. This seems anomalous when one recalls that the nationalised industries' schemes and most other public service schemes are not contributory. It seems even more anomalous in the light of the new National Insurance scheme. What action do the Government propose to take?
These are all important questions which touch on the prospects of future as well as existing pensioners. But, important though they are, they pale before the central question, which was put by my hon. Friend the Member for Burton: what do the Government propose to do about inflation? If they had shown any competence in arresting inflation, we should not be faced with the most expensive Bill of this kind ever produced. The sum of £27 million is a lot, even in these days, especially when it cannot be taken as a mark of generosity to pensioners but is a measure of the Government's incompetence.
I have more retired public servants, particularly retired overseas public servants, in my constituency than most hon. Members, and I know their problems very well. Theirs is a desperate battle to keep the standards to which they were once accustomed and to which they feel entitled. We have been talking about cut-off dates, overtopping and frozen entitlements. That is easy enough. But try talking to an elderly ex-schoolmaster who invested his savings in 3½ per cent. War Loan and try making a convincing case against parity to him or to oneself. This is the tragedy: it is the most responsible, dedicated and loyal people who have suffered the most.
Those who have trusted successive Governments and invested their hard-won savings in Government securities in order not to be a burden on the State find that their reward is that their savings plummet down to less than a half of their value in money terms, and are ravaged further by galloping inflation. No. hon. Member can be ignorant of this process, and no one of us can escape responsibility.
There is a further category of what one might term public servants who do not come as yet within the scope of the Bill and I refer to a letter which I received this morning about a man who is about to become a pensioner of a public service. He used to contribute 5d. a week for a pension of 11s. 8d. a week. This has now been replaced by a new system under which his contribution is made slightly over 13s. a week for a pension of about 28s. a week. There is a possibility that he might qualify for an additional 6s. 6d. a week, bringing his pension up to 34s. 6d. or 35s. a week. This after 50 years on the railways.
That is an indictment of our system, and however little we can bring it into this debate I think a message ought to go out from this House that the nationalised industries should do more for their servants and retired pensioners than they do, and ought to take the initiative in the first place—and we will deal with the Treasury if it refuses their demands.
It was in the right hon. Gentleman the Member for Sowerby who stated so aptly during the passage of the 1962 Bill that a pensioner has no employer to threaten, no arbitration tribunal, and no court of appeal. Therefore, our responsibility to these pensioners is of a very special kind. If we cannot pride ourselves on being a modern and productive society unless we expand our education, we equally cannot pride ourselves on being a compassionate and civilised society unless we make proper provision for retired public servants.
We can argue about the amount of provision, we can argue about the relative allocations, but what we cannot argue about is the effect of inflation on these pensioners, and we have to face the distressing fact that the Government are doing nothing about the root cause of inflation, namely, the continual increase in Government expenditure, without any commensurate increase in the gross national product. This is not the time to embark upon a general economic debate, but it is the fact that the worst enemy of all public service pensioners—indeed, of all old-age pensioners—is the rapid march of inflation. It is also a fact that this process has been advancing more rapidly under this Government during the last three years than for these many years past. It is upon this score, of protection against inflation, that the Government

can do much more to help public service pensioners than by any other action.
With that statement we welcome the Bill as a timely assistance to public service pensioners, but I cannot end without saying to the Parliamentary Secretary that I hope he will make clear the point about the two-year review, and I hope also that it will be possible to discuss this matter without being forced by the concern and consternation of public service pensioners in our country.

8.24 p.m.

The Parliamentary Secretary to the Ministry of Overseas Development (Mr. Albert E. Oram): Early in his speech the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) said, and I agreed with him, that this is not a subject on which we want to engage in an auction. That did not seem to prevent him from putting in one or two bids here and there in what was something like an auction.
Although I think it true to say that practically every speaker in the debate has had some point of criticism to offer of the Bill, I think it would also be true to say that practically every speaker has welcomed the Bill in general. I think this is because we on both sides recognise that those who are covered by this legislation are a group of people who have given long and honourable service to their country through their working lives, are now entirely dependent on us to ensure that their standard of living in retirement is not severely eroded by rising prices as the years go by, and deserve well of the Government and this House. I believe that this Bill demonstrates that the Government entirely accept this proposition.
Before I go on to deal with a number of the speeches which have been made I want, lest I forget it, to take up a specific point raised by the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) during my right hon. Friend's speech. He asked whether the Armed Services would be dealt with according to the same principle as other pensioners, that the largest increases would go to those who retired longest ago. If he were here—I do not think he is—I would give him the assurance that it is our intention that the same principle will apply in the case of the Armed Services.
The hon. Member for Wanstead and Woodford waxed eloquent throughout his speech but particularly, I thought, when he described what he called this tangle of anomalies in the whole series of pensions increase Acts. I thought that was a little steep of him, if we have regard to the fact that five out of seven of the post-war pension increase Acts were the responsibility of a Government he supported, but I think we can accept his point that the system which has grown up in this series of Acts is one which none of us regards as wholly satisfactory for seeking to serve the purpose of insuring the pensioners against inflation.
A lot has been said, and said, I think, most forcefully by my right hon. Friend the Member for Sowerby (Mr. Houghton), about the need to conceive of a new scheme which relates to the scheme outlined in the White Paper issued today. My right hon. Friend, who has great knowledge of this subject from all points of view, explained how early in the life of this Government it was recognised that this question of pensions increase Bills is closely involved with the whole review of social security, and that there will have to be worked out a new relationship between the two sets of pensioners.
The hon. Lady the Member for Tyne-mouth (Dame Irene Ward), my hon. Friend the Member for Oldham, East (Mr. Mapp), the hon. Member for Orpington (Mr. Lubbock) and, most recently, the hon. Member for Horsham (Mr. Hordern) have all mentioned the periodical review which has been part and parcel of earlier debates on this subject. A number of hon. Members have also referred to or quoted paragraph 148 of the White Paper, which refers to the setting up of a Committee to consider the relationship between Civil Service pensions and the State scheme.
The hon. Member for Orpington accepted, as we all do, Mr. Speaker's Ruling that we were not to engage upon a full debate of the White Paper, but he was on to an important point when he asked for information about this Committee. I assure him that the Committee is considering the whole basis of superannuation in the Civil Service in the context of the proposals of the White

Paper on the partial contracting-out of occupational pension schemes. A general formula governing the relationship between occupational schemes and the State scheme is set out in the White Paper. Perhaps the hon. Member for Orpington did not have time before he rose to absorb the whole of that section, but I am sure he will appreciate that the Committee that is mentioned in paragraph 148 is not just a general review body but a Committee which is already hard at work on a practical, detailed and technical task. It is this Committee which will be considering the relevance of future Bills of the kind which we are debating today to the State system. Included in that consideration will be a study of the possibility of a review period. We must wait and see the results of the Committee's work, but I assure those who have raised this point that the Committee is a very practical, hard-headed one.

Mr. Patrick Jenkin: I am most grateful to the Parliamentary Secretary for giving the House so much information about the work of the Committee. Is he able to go a little further and say whether the Committee will consider the fundamental questions of funding and financing and matters of that sort to which I made a brief reference in the course of my earlier remarks?

Dame Irene Ward: Who are the members of the Committee?

Mr. Oram: I am afraid that I have not a list of those who are on the Committee.

Dame Irene Ward: Are there any women?

Mr. Oram: In reply to the question which the hon. Gentleman has just asked, the Committee will not be considering this general question, but it will be taking a hard look at all the implications of the White Paper upon public service pensions.
The hon. Member for Burton (Mr. Jennings) fully carried out his undertaking not to be partisan, and he presented the difficulties very fairly. He expressed as well as I would hope to do the reasons why the Bill has to be a holding operation, as he said, in the light of the new developments that we see ahead. He said that 1956 could perhaps be considered as a fulcrum; the hon. Member for Wanstead and Woodford called it a


new starting-point. I would not call 1956 a new starting-point. I would rather regard as a new starting-point this day on which this Bill has coincided with the White Paper, a most important document in the history of our social services.

Mr. Jennings: In mentioning the year 1956 as a fulcrum or starting-point, I was dealing specifically with bringing pensions up to parity. The Bill, if we regard it as a new starting-point, is the beginning of a new system in which the merging of certain sections of public and private pensions will be considered. Is the Parliamentary Secretary saying that today should be the starting-point of bringing pensions up to today's parity? I hope he meant it.

Mr. Oram: I did not mean to be taken quite so far as the hon. Gentleman is now taking me. I was trying to say that I see today as a more significant starting-point in terms of policy-making than the year 1956 to which he referred.
My hon. Friend the Member for Bristol, Central (Mr. Palmer), my hon. Friend the Member for Dunbartonshire, West (Mr. Steele) and the hon. Member for Tynemouth all very skilfully, within the generous Ruling of Mr. Speaker, managed to introduce a good deal of discussion about the pensioners of nationalised industries. With a great deal of knowledge and experience in these matters, my hon. Friend the Member for Bristol, Central drew some important parallels between the fate of pensioners of nationalised industries and that of pensioners covered by the Bill. I do not think that any of the three disputed the central proposition that, from a legal point of view, nationalised industries do not need statutory authority such as that in the Bill to raise the pensions of their pensioners.

Mr. Palmer: But it cannot be disputed that they need statutory authority and, after all, it will be given by the same Government.

Mr. Oram: Yes, but, within the context of a Second Reading of this Bill, I think that my hon. Friend was lucky even to get as far as he did. I congratulate him on his success in that respect.

Mr. Steele: On a point of order, Mr. Deputy Speaker. When we have discussed

pensions increase legislation in the past, always we have had this problem about raising matters which we were told were outside the scope of the Bill; yet in every debate we have discussed economic matters and questions of inflation. It seems that the only matter that we cannot discuss is that involving a group of pensioners who do not come within the scope of the Bill.

Mr. Deputy Speaker (Mr. Sydney Irving): I am not clear what the hon. Gentleman's point of order is. It is true that Mr. Speaker ruled rather generously with regard to railway superannuitants, but it is a general rule that incidental references may be made, and that is what has been followed this evening.

Mr. Oram: I think that I have made nothing more than an incidental reply. Perhaps I should leave it at that.

Dame Irene Ward: In view of the fact that the hon. Gentleman has congratulated everyone, it means that we managed to get away with quite a lot. If we were in order in doing that, why cannot the hon. Gentleman answer?

Mr. Oram: I am in something of a dilemma, Mr. Deputy Speaker. I invite rebukes either from the hon. Lady or from you.

Dame Irene Ward: Not at all. The hon. Gentleman has made no replies to our points.

Mr. Oram: Terrified as I am sometimes by the hon. Lady, I am even more terrified of rebukes from the Chair.
One important point concerning my Department, the Ministry of Overseas Development, was raised briefly by the hon. Member for Wanstead and Woodford and in more detail by the hon. Member for Belfast, South (Mr. Pounder). It concerns that group of pensioners dubbed quasi-Government employees, who do not benefit from these pensions increase Measures. I will not attempt to answer the point in detail, because it was as recently as 20th December that a full debate on the subject was raised by the hon. Member for Liverpool, Wavertree (Mr. Tilney). On that occasion, my right hon. Friend made a very detailed reply. I noted that the hon. Member for Belfast, South pointed out that it is not just a matter of a few


pensioners in West Africa who are concerned, but pensioners elsewhere. I take the point, and it formed a large part of the reply given by my right hon. Friend to that earlier debate, as the hon. Gentleman will see if he cares to refer to it.
I have already answered two of the points raised by the hon. Member for Tynemouth. In one case, doubtless she will say that I have failed to reply to her. But the hon. Lady raised a third point: an analogy with the 1962 Act which included the £20 flat-rate increase for the over-70s. She asked whether we could not consider doing something of that kind in the Bill. I assure the hon. Lady that we have already looked at that point. Indeed, she will have noticed that the 1965 Act did not take over from its predecessor that particular method of uplifting pensions. Frankly, the reason was because it was found particularly awkward to administer. To superimpose flat-rate increases on a pattern of proportionate increases greatly adds to the administrative task of paying pensions increases. For that reason, it was not included either in the 1965 Act or in the Bill.

Dame Irene Ward: I am sorry to interrupt again. Really, it is an idiotic answer to say that this great country of ours cannot find an administrative way to do what we were able to do in 1962. I do not care how difficult it is. It ought to be done.

Mr. Oram: We have found an alternative way, which is included in the Bill. It is the method of having the escalator stepping up by 1 per cent. back to an earlier date. This enables us to give benefit increases to pensioners who retired longest ago. The Association is particularly concerned about this group of pensioners. I know that the hon. Lady and other hon. Members have made this point on several occasions. However, I assure the hon. Lady that, although she may not agree with our conclusions, we have seriously examined the suggestion she has put before the House.
I think that I have answered most of the specific points. A number of more detailed points we shall take up in Committee.
I conclude with a word about our intentions for the future. We have always

made it clear that the development of any new system for increasing public service pensions could be sensibly undertaken only in the light of the social security review. This has been reflected in the debate today.
Disappointment has been expressed that the Bill should follow so closely the form of its predecessors. But it could hardly be expected, in all fairness, that we should be ready with radical new proposals to coincide with the publication of our plans for a complete transformation of long-term social security benefits. It will be clear to all who study these plans in any detail—and from today on I am sure that there will be a great deal of study and debate about them—that they must have important implications for many aspects of public service pension schemes which will now have to be examined in depth. To have attempted to work out a new approach to pensions increases in advance of the formulation of these plans would have made little sense.
I have already said that the problem is not easy. If it were, better arrangements would have been introduced long ago—perhaps in one of the five Measures to which I referred earlier. I cannot say at this stage what form the new arrangements may take or when we may be ready to take the next step forward. Much will depend on the outcome of the Committee's work, to which reference has been made. But I assure the House that as soon as we complete the immediate task of securing for our pensioners the improvements proposed in the Bill we shall turn our attention energetically to seeking a more permanent settlement of this problem.

Mr. Lubbock: The White Paper stated that the new arrangements will come into force on 1st April, 1972. Is it the objective of the review which is now to take place under the direction of this Committee that simultaneously with the revised State scheme public service pensioners will come on to the new arrangements?

Mr. Oram: There is no such direct implication in anything that has been said today, but obviously we hope that well before then we shall have the results of the work of the Committee to which


I have referred, and we will push it forward as soon as possible.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

PENSIONS [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to provide for increases or supplements in respect of certain pensions, it is expedient to authorise the payment out of moneys provided by Parliament of any expenditure incurred by a government department attributable to any provision of that Act—

(a) providing for the increase of the pensions specified in Schedule 1 to the Pensions (Increase) Act, 1965 and also certain other pensions ('pension', for this purpose, having the same meaning as in that Act), not being an increase determined by reference to the duration, description or emoluments of any service (whether the pensioner's own or that of other persons) or to the amount of any pension other than the pensioner's own, or to circumstances not obtaining in his case;
(b) amending any provision of a former Pensions (Increase) Act so as to extend the benefit of it to a pension not specified therein, or to remove a condition of entitlement to that benefit;
(c) corresponding to. or extending in relation to any pension increase provided by the said Act of the present Session, any of the provisions of sections 3 to 6 of the Pensions (Increase) Act, 1959, section 3 of the Pensions (Increase) Act, 1962 and sections 2 and 3 of the Pensions (Increase) Act, 1965,

and any increase attributable to any such provision as aforesaid of the said Act of the present Session in the sums payable out of moneys provided by Parliament under any other enactment.—[Mr. Ernest G. Perry.]

HORSERACE BETTING LEVY BILL

Order for Second Reading read.

8.45 p.m.

The Under-Secretary of State for the Home Department (Mr. Elystan Morgan): I beg to move, That the Bill be now read a Second time.
The object of this short Bill which the Government are now recommending to the House is to prevent the threatened collapse of the statutory arrangements for the financial support of horseracing through the annual levy on bookmakers and the Totalisator Board. These arrangements, which were first introduced in the Betting Levy Act, 1961, and are now contained in Sections 24 to 31 of the Betting, Gaming and Lotteries Act, 1963, have provided a source of income on which the horseracing industry, in all its ramifications—owners, trainers, breeders, jockeys and apprentices—has become largely dependent, and which has also greatly benefited racegoers.
If the system were now to collapse it would be a most grievous blow to a sport to which thousands of people look for their livelihood and which is a source of great pleasure to many thousands more. It would be a blow which this sport would find the greatest difficulty in surviving.
The principle on which the present arrangements rest is a straightforward one. Our bookmakers depend preponderantly on horseracing for their business. It is very much to their benefit that the financial viability of the sport should be maintained, and it is, therefore, as much a matter of self-interest as of obligation that they should contribute to it. The bookmakers themselves recognise this. It is not the principle of the levy that is at issue; it is the assessment and the system by which contributions are to be settled and collected.
The Government have no direct responsibility. They have provided a statutory framework within which the levy is to be raised, after discussion between the horseracing interests and the bookmakers representatives and, where possible, with their mutual agreement, but that is all. The system has been conceived as a cooperative one, depending on the good will of all parties, and it is because this can


no longer be relied upon that it is now threatened.
Briefly, the current arrangements are that proposals for the levy which is to operate in the coming year are first prepared by the Bookmakers' Committee—a representative body appointed by regulations made by my right hon. Friend the Home Secretary. These proposals are then submitted to the Horserace Betting Levy Board, of which the chairman and two members are independent persons, nominated by the Home Secretary in consultation with the Secretary of State for Scotland. The remaining membership consists of representatives of the turf authorities—two from the Jockey Club, one from the National Hunt Committee and the chairmen of the Totalisator Board and the Bookmakers' Committee.
If the Levy Board agrees with the Bookmakers' Committee's proposals the scheme is promulgated accordingly. If agreement cannot be reached the matter is referred to the chairman and independent members of the Board—that is, the three persons nominated by the Home Secretary—who may impose a scheme of their own. They are required, in doing this, to balance the needs of horseracing against the capacity of the bookmakers to pay, but having done that, their decision is absolute and there is no appeal against it.
The 1963 Act requires that in every scheme the bookmakers should be divided into categories for the purposes of contribution. When a scheme, whether agreed or imposed, has been promulgated, it is for the bookmaker to declare to the Board in which category he falls. The Board has no power to inspect his books to verify this. However, if the Board is dubious of a declaration, or none is made, it may refer the case to the Bookmakers' Committee, which is then required to examine it, and it may impose an assessment of its own.
The bookmaker is then liable accordingly unless he makes uses of the right available to him under Section 28 of the 1963 Act to appeal against the assessment to an impartial tribunal appointed under Section 29. The tribunal can alter an assessment, but it may not either reduce it or place the bookmaker in the

exempt category, unless he gives to the Bookmakers' Committee all the facilities it requires for the investigation of the case. In other words, if the bookmaker is to hope to succeed in his appeal, he must, in practice, be prepared to submit his accounts.
Finally, on the failure of a bookmaker to pay his assessed contributions, the Levy Board has two remedies. It may proceed against him in the civil courts for recovery of the levy as a debt, or it may object before the betting licensing committee of the justices to the renewal of his bookmaker's permit on the grounds that he is not a fit and proper person to hold it. The justices are entitled, under Schedule 1 of the Betting, Gaming and Lotteries Act of 1963, to refuse a renewal on those grounds. Of course, whether they do so or not is entirely within their discretion.
The arrangements enshrined in the Statute are those which were originally agreed between all the parties. For the past six years, they have worked at least passably well: one could not put it much higher. During that time, about £17 million has been raised in levies from the bookmakers and the Totalisator Board and this sum has been spent on the improvement of horseracing and breeding and the development of veterinary science. It has, however, been the exception for levy schemes to be agreed between the Bookmakers' Committee and the full Levy Board.
The majority of these schemes have had to be imposed by the chairman and the other two independent members of the Board. The possibilities of disruption have always been present. This year, the conflict which has always been dormant has finally erupted, with the decision of Lord Wigg and his two independent colleagues on the Board to impose a scheme in which turnover has been substituted for profit as the chief basis of assessment and to promulgate in advance a scheme for next year which will perpetuate that system and will raise the total of contributions by the bookmakers from £2·3 million to £3·8 million, an increase of about 60 per cent.
These schemes have been designed to shift a large part of the burden from the smaller men whom Lord Wigg and his colleagues consider to have borne more


than their fair share in the past, to the larger bookmaking concerns. By no means all the bookmakers have been opposed to these developments, but an influential and articulate section, including most of the large concerns, has claimed that a levy based upon turnover cannot take into account the bookmakers' capacity to pay, and is, therefore, in default of the statutory obligations, and that the amount of the levy proposed for next year is well beyond the reasonable ability of the trade to meet it.
The result of this controversy has been that of the 9,000 or so declarations due under this year's scheme no fewer than 3,500 were still outstanding at the end of 1968. These included those from many of the larger concerns, so that out of a total of some £2·3 million due to be collected by the end of October, last year, less than £1 million had been raised by that date. The Levy Board is now referring all these outstanding cases to the Bookmakers' Committee for scrutiny and the Government trust that the Committee will deal with them properly and expeditiously in accordance with its current statutory obligations.
A far more serious situation, however, threatens to develop next year, when the new and enhanced levy of £3·84 million will be due for collection. So opposed is the Bookmakers' Committee to this scheme that it has been suggested that if bookmakers fail to submit declarations and the cases are then referred by the Levy Board to the Bookmakers' Committee, the Committee will either refuse to deal with them, or will put all of them into the exempt category. As the House appreciates, this would be an open invitation to default and a deliberate obstruction to which, under the present law, there would in practice be no effective counter.
The Government have no wish to aggravate the situation and nor do they intend now to pronounce upon the question of whether the sum to be raised in the coming levy scheme is excessive. While the Bookmakers' Committee may genuinely believe that the methods which it is proposing to adopt are the only methods open to it to call attention to its grievances, such as they may be, one thing which is absolutely clear is that

the Government cannot tolerate wrecking tactics of this kind. Neither can they allow the intentions of Parliament in passing the Betting Levy Act, 1961 to be frustrated through the refusal of the Bookmakers' Committee to perform what, after all, amounts to its statutory duty.
It is too readily forgotten that the betting levy was one feature of a new dispensation which included others of great benefit to the bookmakers, in particular, the right to establish betting offices. It it not surprising that experience should have revealed certain defects in the system, but they are not to be remedied by obstruction. The correct remedy is amending legislation, and this the Government now propose to apply.
It is always easy to be wise after the event, but it seems to the Government to be an evident flaw in the present arrangements that they leave disputed schemes to be decided by the chairman and independent members of the Board who are also responsible, with their colleagues on the Board, for expending the money which the levy brings in. However conscientious and however impartial the chairman and independent members may be in balancing the financial capacity of the bookmakers to pay against the needs of horseracing, they must in the circumstances be constantly exposed to the suspicion of bias in favour of horse racing interests.
This is a false and unfair position in which to put them. If confidence is to be restored, the responsibility for imposing schemes for raising money must be divorced from that of spending the money which has been raised. Justice also requires that, in the absence of agreement between the parties, a levy of this kind, which has many of the features of a tax, should not be imposed by people who cannot be made answerable for their decisions, except in the Press, and who have no other forum in which to defend them.
It therefore seems to be in the interests of all concerned that responsibility for determining disputed schemes should be transferred from the chairman and independent members of the Board to the Secretary of State, whose decisions may be questioned here in Parliament. That is what Clause 1 does.

Mr. Antony Buck: What are the hon. Gentleman's views on whether a scheme to be approved by the Home Secretary should be laid before Parliament as a Statutory Instrument, so that we can have a proper opportunity to consider it in detail?

Mr. Morgan: That goes rather beyond the present provisions of the Bill, but it is a matter that the hon. Gentleman can raise in Committee, if he is a member of the Standing Committee, and the Bill gets its Second Reading. I do not think that that is necessary, but there would be the opportunity from time to time to question the Secretary of State's decision.

Mr. John H. Osborn: Could the hon. Gentleman explain why the Home Secretary should have this responsibility. Is not it a departure that might set interesting precedents? I should like him to dwell on this before he proceeds.

Mr. Morgan: I shall deal with that, but I hope that what I have tried to say already in examining the weaknesses of the present system will have conveyed to the hon. Gentleman the reasons for transferring these powers to the Secretary of State. If it is the view of the House that the Secretary of State should lay Orders before the House annually to set out a scheme, it is rather surprising that such a suggestion has not been made during the seven or eight years that the present system has operated.
If the Home Secretary is to exercise this responsibility, it is only right that he be given a proper freedom with which to discharge it. Clause 1 empowers him, though it does not require him, to delegate an inquiry to an independent person or persons, though the final decision will remain his alone. In taking it, he is not expressly enjoined, as the chairman and independent members of the Board now are, to balance the financial capacity of the bookmakers against the needs of horseracing. From the very circumstances of his adjudication—a dispute between the Bookmakers' Committee on the one hand and the full Levy Board on the other—these are considerations that he will have to weigh.

Sir Eric Errington: Can the hon. Gentleman explain how it has been worked out that the bookmakers

can pay the much increased levy of £3 million? Many people with whom I have been in touch inform me that it is too heavy a load on the bookmaker.

Mr. Morgan: The hon. Gentleman must not assume that the levy will be £3 million. When I come to Clause 2 he will appreciate that this is a matter that will come before the Secretary of State for the exercise of his discretion. Therefore, there can at present be no question of talking about any fixed sum or any percentage of turnover.
The Secretary of State will have to weigh the considerations I have outlined, but they may not be the only ones. The transfer of this responsibility to a Minister of the Crown must enlarge the perspective of judgment as compared with that which was vested in the independent members of the Levy Board. The public interest may require certain other considerations, fiscal, social or economic, also to be taken into account.
This power of review will apply to the levy scheme, already promulgated by Lord Wigg and his colleagues for the coming year, which has been the immediate cause of the present dispute. Clause 1 requires the Secretary of State to confirm that scheme, with or without modifications. Before a decision is reached, the Bookmakers' Committee will be given every opportunity to state its objections either to the Secretary of State or to any person or body to whom under subsection (5) he chooses to delegate the conduct of inquiries on his behalf. But when a decision has been reached, whatever it may be, the Government intend that it shall be enforced without wrangling or obstruction. In short, Clause 1 provides the bookmakers with all the safeguards which they can reasonably expect and which are lacking in the present arrangements.

Clause 2 deals with the other side of the coin by preventing them from obstructing a scheme once decided upon. It does this by transferring from the Bookmakers' Committee to the chairman and independent members of the Levy Board the power to impose assessments in default of declarations by bookmakers and of revising assessments when declarations appear open to question.

Finally, it is necessary to strengthen—

Mr. John M. Temple: The hon. Gentleman has gone through the Bill Clause by Clause. He has omitted a reference to Clause 5, which by repeal eliminates the vital safeguard for the bookmakers of reference to their capacity to pay. Will he say something about Clause 5?

Mr. Morgan: I have dealt with that already in explaining to the House the purpose of transferring this power from the independent members of the Board, who, after all, are not persons answerable to Parliament and who do not have this rostrum at which to explain their actions. It is only right that the Home Secretary should be given a much wider discretion. It is perfectly proper for him to take into account the ability of bookmakers to pay, to take into account the needs of the horseracing industry, and to take into account all manner of other considerations as well—the financial policies of the Government and wider social considerations.
I appreciate that in Committee, if the Bill is given a Second Reading, a classic battle will be fought on this question, but I am sure that the hon. Gentleman will accept at this stage that the expression which has been in statute since the Betting Levy Act, 1961, and which now appears in Section 27(5) of the 1963 Act, is one which may well be incapable of definition. It has never been tested. What does the term "capacity to pay" mean? It may mean next to nothing at all. On the other hand, can one imagine a term more capable of an infinite variety of interpretations than "the needs of the horseracing industry"?
It is necessary to strengthen the sanctions against non-payment of contributions, whether those be assessed on a bookmaker's own declaration, by the chairman and independent members of the Board in default of or in substitution for a declaration, or by a tribunal on appeal. The present sanctions are quite insufficient. I am sure that the House accepts that. Proceedings taken in the civil courts for recovery of debt can be expensive and protracted. Only in the exceptional case can a remedy of that kind by effectively used.
Refusal by a betting licensing committee to renew a bookmaker's permit on complaint of non-payment by the Board

is a severe enough sanction, but, since it would close down a bookmaker's whole business for at least a year, it is, no doubt, on account of that very severity that justices are reluctant even to contemplate it except in the most extreme and aggravated cases.
So long as the decision is left entirely at the discretion of the justices, the weight of responsibility which it imposes on them is greater than they can reasonably be expected to bear. Clause 3, therefore, relieves them of the greater part of this burden by making it mandatory upon them to refuse a renewal on a second default in a period of five years if, but only if, the Levy Board appears by counsel or solicitor and actually makes such an objection.
I have so far been dealing only with the payments made to the levy by bookmakers since it is here that the dispute has arisen. The Totalisator Board also makes a substantial contribution. Indeed, that is the main object of its business. Section 30 of the 1963 Act provides that, in the absence of agreement between the Totalisator Board and the Levy Board over the amount of the contributions, the matter should be decided, as in the case of the bookmakers' contributions, by the chairman and two independent members of the Levy Board.
There have in the past been some differences of opinion between the two Boards about the extent to which the profits of the Tote should be ploughed back into the business or made over to the levy, but these have always, in the end, been satisfactorily resolved. It cannot, however, be assumed that this will always happen. Consistency requires that an unresolved dispute between the two Boards should in future be decided by the Secretary of State, and Clause 4 provides accordingly.
From the account which I have given of the provisions of the Bill, the House will, I hope, agree that it is a moderate and realistic Measure. Although it has been introduced as an emergency Measure against a background of dispute, the Government have no wish to inflame feelings any further by undertaking an inquest on the failure of the present arrangement. The Bill leaves the structure of the law essentially unchanged while reapportioning the responsibilities in such a way as to remove the worst sources of friction.
The Measure attempts to be fair to all the parties in this dispute, while preserving in accordance with Parliament's intentions, the scheme for the self-financing of the racing industry, which has already brought great benefits to it and which could not now be effectively replaced. The House will, I am sure, in general welcome the objects of the Bill and agree with the remedies which it applies. It is, therefore, with confidence that I commend the Bill to the House.

9.13 p.m.

Mr. John M. Temple: I thank the Under-Secretary for the clear exposition that he has given of what is in the Bill. It is disappointing that we have had no mention of the sport of horseracing. I have taken a great interest in horseracing for a good part of my life and I am a tremendous admirer of the sport.
Being the first speaker from the Opposition, I wish to make it clear here and now that my hon. Friends and I have no wish to see the sport collapse. Quite the contrary. We want to see a thriving horse racing industry and all that goes with it, because we believe that British bloodstock is the finest in the world and that anything we can do to help the bloodstock industry should be done. We must, however, keep a spirit of fair play as between the bookmaking and punting fraternity and those on the other side who are the recipients of this levy.
This is the first time—although I have spoken on many occasions in debates on betting subjects—that I have spoken in a debate on a betting levy Measure. In fact, I never thought that there would be another such Measure because I knew that the one which we introduced eight years ago was working extraordinarily satisfactorily.
However, obviously something seems to have gone wrong. Whatever it may be—the Chairman of the Levy Board or whatever else—some spanner has dropped into the works, and it is this which I wish to examine tonight. Everybody in the bookmaking fraternity has agreed that there should be a substantial contribution from off-course betting towards the sport of horseracing. It was in that spirit that the first levy Measure was produced.
The first levy scheme was an agreed procedure. I am not speaking for any sectional interest here tonight—I never have done and never will—but the book-making fraternity knew that there were certain safeguards built into that scheme and the one about which I interrupted the Under-Secretary was this recognition of their "capacity to pay". I do not think that the hon. Gentleman really explained very convincingly why this safeguard had been taken out. If it meant so little, as he said, why take it out? Nevertheless, significantly, it has been taken out.

Mr. Elystan Morgan: The point I sought to make—perhaps I did not articulate my views as clearly as I should—was that, whereas it was very relevant in relation to the Levy Board, particularly the independent members of the Board who have the right to decide under the present law, totally different considerations apply when that discretion is vested in the Secretary of State, who is answerable to this House.

Mr. Temple: I took the point the first time—in fact, I took it for the second time, and now this is the third time that the Under-Secretary has made that point; it did not require to be made a third time.
The fact remains that a general betting duty is the law of the land. The Under-Secretary said that a difficulty had arisen because a turnover tax was now being introduced into the levy rather than a tax on profits. The Benson Committee, chaired by Sir Henry Benson, an independent chairman, has recommended that the betting levy should be part of the general betting duty and, therefore, firmly tied to turnover. That recommendation is, I understand, acceptable to all sides of the racing community. As we all know, the whole basis of the general betting duty today is a turnover tax.
I cannot understand why in order to collect exactly the same type of levy we want two different organisations, the Treasury collecting on the one hand and the Levy Board collecting on the other. I thought that we had a Government moving into the technological age who could put together two schemes which mean exactly the same thing. But to devise some mechanism of this sort


seems to be beyond the capability of this Government.
The difficulty about the Bill has really been a legal one. It was not surprising that the Under-Secretary introduced it in very legalistic terms. I thought too legalistic for a Bill concerned with horseracing. The fact is that the proposals of the Chairman of the Betting Levy Board, which I have no reason to suppose will be unacceptable to the House Secretary, are to double the levy on turnover for the next year. This doubling of taxes is getting an extraordinarily bad habit of the Government. The Chancellor comes in and doubles the general betting duty. I suppose that the Chairman of the Levy Board, to be a bit "me too-ish", comes along and says that he intends—[Interruption.]—to double the betting levy. This means a 65per cent. increase—[Interruption.]—this—

Mr. Speaker: Order. We cannot have a running commentary, even from the Front Bench.

Mr. Temple: It was not worrying me in the least. This increase means a 65 per cent. increase in the amount of money to be collected by the Levy Board in one year. I thought that the norm was about 3 per cent. for increases. The figure of 65 per cent. takes a lot of explaining away, and the Under-Secretary must do a little better than he did on the cash side, not the legalistic side. What we are talking about is cash, which is coming mainly out of the pockets of the punters.

Mr. Marcus Lipton: Can the hon. Gentleman explain how he arrives at the figure of 65 per cent. increase? The proposal is that the charge on turnover should go up from 5s. per £100 to 10s. per £100.

Mr. Temple: That is doubling the turnover side. It will mean an increase in the levy from £2·5 million to £3·8 million, which is 65 per cent. Those are the exact figures which I am sure will be agreed by the Front Bench. I will pass over a copy of the Horserace Betting Levy Board's Seventh Report, prepared by none other than Lord Wigg himself, which will confirm this. So it must be correct, I would assume. This is not a Report prepared by the National Association of Bookmakers!
Bookmakers operate today, and always have operated, on a very narrow margin.

I believe that the gross profit margin is about 2 per cent. of turnover from office betting and 1 per cent. from on-course betting. I will not go into the difference between course and office betting. I know that there are technicalities there. One-half per cent. is a substantial figure in relation to either 1 per cent. or 2 per cent. This vast increase in the betting levy may well reduce turnover and, therefore, the revenue which will accrue to the Government.
I have tried to justify the Measure, because I wish to justify it. However, I want to ask the Under-Secretary some questions. Is it entirely fair? He made a number of references to receipts from the Totalisator. From 1962–63 to 1967–68 receipts in respect of levy coming from the Tote have fallen from £900,000 to £600,000. Over the same period receipts from bookies have risen from £900,000 to over £2½ million; and it is proposed that they shall rise to £3·8 million, as I have said.
I remember the Peppiatt Committee being set up by Mr. R. A. Butler, as he then was. The basis of that scheme was a levy on profits. That scheme worked perfectly well. It is only when the change is being made from a profit to a turnover basis that the Bookmakers Committee has fallen out with the Chairman of the Levy Board.
I have spoken about betting duties on many occasions. I know more about betting duties, I think, than about the levy. There is no question but that a large revenue is being raised from betting duties. The combination of the increase in tax and the increase in the turnover duty is causing the turnover to decrease. I do not know whether the Under-Secretary knows the figures, but in October, 1968, gross turnover on horseracing was down by about 20 per cent. compared with October, 1967. I believe that the turnover in the country as a whole last year was down by about 10 per cent. on the year before. We must be very careful not to drive turnover down further; otherwise the Revenue itself will be affected by these proposals.
Is it necessary? I am not so sure that the increase of 65 per cent. is necessary. At least, I should like it to be explained to the House why in one year there should be such an extraordinary increase.


I can understand that racing needs more over the years because I have read the Report of the Benson Committee. I am very ready to be convinced that it is necessary to increase the levy by 65 per cent., but I should like to know whether it is necessary at this moment of time for the good of racing.
I propose to be absolutely fair in the use of my statistics. One might think that the number of racehorse owners was declining, and also the number of colours registered—[Interruption.] Mr. Speaker, I am still getting this constant running commentary from the Treasury Bench. I wish the Ministers responsible would listen to my speech. I think that the Minister for Sport will learn something, because in a few minutes I shall say something favourable to him.
In 1931 the number of colours registered was 4,200. In 1959 it was 6,500. The number of colours registered under rules of racing in 1968 was 7,700. In 1962 there were 9,000 horses in training. In 1968 the number had risen to 11,000. No one can say that the number either of owners or of horses in training is falling away. It is against that background that we are being asked to increase the levy to this substantial extent.
Attendances are going down, and this is most disappointing. The reason, I believe, is to an extent that the number of bookmakers on the racecourse is not what it was. We on this side have many times advocated a differential between on-course and off-course betting. That would be a real shot in the arm to racing. Attendances have been going down over the last seven years.
I wonder whether this increase in the levy—of about £1½ million in a year—is desirable. It will come out of bookmakers' profits. I hope that they will be able to pay it out of their profits. There is doubt whether they will. Had that amount of gross profit been returned as such for taxation purposes, a considerable tax bill would have accrued. I believe that the Inland Revenue is giving away, albeit inadvertently, about half the total sum, or something like £¾ million in revenue, which otherwise would have been collected for the good of the country.
I am not always one of those who talk of protecting the Revenue, but I would

say to the Minister of Sport that there is a case for a general betting levy which should be devoted to sport of all kinds. If there is a levy on horseracing, there may well be a case for a levy on greyhound racing or other kinds of betting levy.
I should like to see a general betting levy allocated as between horseracing and all other sports, including the Olympic teams and everything else. That is a sensible suggestion. I am surprised that when the Government have grasped the nettle of introducing the Bill they have not looked a little further and dealt with what I regard as the extremely desirable aspect of the advantages of giving the revenues from a general betting duty to a much wider circle of deserving interests in the sporting world.
I should like to comment on the legal side of the new proposals. I am rather surprised that the final arbiter of all these problems is to be the Home Secretary. I should not have thought that it was a job he particularly wanted. It is not insignificant that the Home Secretary appoints the Chairman of the Horserace Betting Levy Board. Thus, the Chairman must be someone whom the Home Secretary gets on with, approves of and likes.
When the Chairman of the Levy Board promulgates a scheme, he obviously takes it to his pal, the Home Secretary. The Home Secretary is put in an uncommonly awkward position if he turns down his good friend the Chairman of the Board and says, "I do not think much of your scheme." The Chairman of the Board might well say, "We were pals before we entered into these conversations." The Home Secretary might certainly be put in an extraordinarily embarrassing position.
I seriously suggest that the proposal of my hon. Friend the Member for Colchester (Mr. Buck) is a good one. If the Home Secretary feels that he must back one scheme as against another or give a determination, he should bring it to the House to be able to justify himself in public and before the House on the basis of the scheme which he has accepted, approved and, therefore, considered to be desirable. There is no question that the Home Secretary's responsibility needs a good deal of examination. I would just as soon have this


matter taken over by a Treasury Minister. The Home Secretary will have to assure everybody that he is handing out fair treatment, having regard to all the circumstances, to the punters, the bookmakers and, of course, the racing community.
To conclude, I believe—and this is suported by the Benson Committee—that the levy and the duty should be one. I was always clear about this from the first time that the Peppiatt Committee reported. When we were discussing the general betting legislation years ago which brought in the betting shops, it was obvious to me that there would be a general betting duty. That followed as night follows day.
I hope that equity will be done, and will be seen to be done, to the various parties concerned. I end as I started by paying tribute to the British bloodstock industry. I am delighted that British bloodstock prices are high and that our bloodstock is being appreciated throughout the world. If this levy goes towards the improvement of the bloodstock industry, it is worth while. But let us be fair in doing the right thing.

9.30 p.m.

Mr. Robert Sheldon: I find myself in the difficulty of not knowing a great deal about the background of the horseracing industry and yet, at the same time, failing to understand why the House should be involved in what would appear to be private arrangements between those people who earn their living from bookmaking and those who spend part of their living in enjoying the sport of horseracing. This is a purely personal matter between two sections of the community. It is fair enough that some people might be very interested in horseracing and others might be less interested, but I do not see why we should be legislating in a matter of this kind.
I am not of the opinion that horseracing is a pernicious or bad sport. I think that the Government should take a neutral view of horseracing, as they do of many other sports—tiddley-winks, bridge, or whatever it may be. The Government neither assist nor tax; they are neutral. They say that people should enjoy themselves as they wish in the time available

to them. The Government should not become involved in these matters.
This is a private arrangement which, apparently, does not seem to be working very well. The Government took a previous line in this matter. I think that they were wrong. They should have adopted a neutral position. If the Government involve themselves in assisting one section of the community to pay £4 million to another section when there is a tax on the first section of the community, it must be asked why the money is not coming to the Exchequer. If the argument is put forward, as it has been put forward tonight, that this is to make the sport viable, this is not an interest which I have very much at heart. If I see any other form of sport declining about which I believe the Treasury should take a neutral view, it is not something which particularly distresses me, and it should not particularly distress the House.
On the other hand, if we say that the Government cannot be neutral about a matter from which it raises revenue, I would question that, because there are areas in which the Government do not try to assist. They do not help in the consumption of tobacco and alcohol, and if the consumption of them were to decline the House would not try to restore their consumption. A similar principle is involved here. If the bookmakers' interests were to decline as a result of the decline of horseracing, that would be a matter for them. If they are not in a position to see that their own interests lie in the promotion of horseracing, it is not up to us to say that we understand their best interests better than they do.
Many voluntary agreements are made. I do not see why the Home Secretary should put himself in the position of having to arbitrate in this way. This is a principle on which, I think, it would be very wrong to set out, and I would be very happy indeed if we were to proceed no further with it.

9.35 p.m.

Mr. James Dance: I am grateful to have an opportunity to speak briefly in support of the Bill. It is a good Bill. It is doing the right thing. The whole purpose is set out in the Explanatory Memorandum. It is for
… the purpose of benefiting horse racing, horse breeding and veterinary science.


There is a lot of misunderstanding at present about where this money will go. It has been put about that it is going to rich racehorse owners. This is complete nonsense. In today's Daily Mail there is an extremely good article which puts this clearly, and I would read a little of it:
The industry must have a bigger levy if it is to remain a straight, high-class sport for the public to bet on and if it is to produce horses fit to hold their own in international competition.
This is important, because we export a lot of our bloodstock throughout the world and it is extremely valuable for our export trade.
The article goes on to say:
Some bookmakers claim the levy is designed merely to put money into the pockets of rich owners, but this is an unworthy red herring. In any business, the workers cannot be adequately paid unless the money comes in through the top.
The writer gives some rather interesting figures:
Last week the racehorse owners issued figures showing that the plan for an additional £487,000 prize money would yield only £10,583 to the owners. More than £97,400 would go in statutory deductions for trainers, jockeys and stable staff, £300,000 to meet an increase of £1 a week in training fees and £79,017 to meet the increase of £3 a ride in jockeys' fees.
I know that some people consider that some flat-race jockeys receive very good rewards, but they should see the plight of the unfortunate National Hunt jockeys at the moment. They are getting no rides; they do not get the big retainers which the flat-race jockeys get; and they must be going through a very difficult time. I know that it is the intention to put some of this money coming through this increased levy towards helping them.
However, it does not end there. One has only to pick up a paper any day of the week to see the constant demand for better conditions for racegoers at racecourses. I am no longer a director of a racecourse, though I have been one, but I know that improving those conditions costs a very large sum of money. That money has got to come from somewhere and it is certainly not coming through attendances at racecourses at present. We must have much more realistic wages for stable lads and the people who take tickets as the racegoers go through the gates, and the card

sellers, and so on. These are all people who will benefit out of the money. It is not going just to the rather limited number of very rich racehorse owners.
One has only to go to National Hunt racing these days to realise—I am sure hon. Members will agree with me—that the people who run racehorses today are not very rich. Most of them are farmers, some of whom, under licence, actually train horses themselves. These are the people who support this very dicey form of racing. It is dicey because of the uncertain weather, and it is not only frost which can cancel a meeting; it may be fog; and if it is not fog then, as we have seen in recent days, it is very heavy rain, which makes the going impossible.
I would quote a few figures which I have been given, which I believe to be accurate, and which my hon. Friend the Member for the City of Chester (Mr. Temple) will be interested to hear. When the Levy Board was set up it was estimated, I gather, that it would receive about £8 million. In fact, it has been receiving under £4 million. These figures, of course, represent contributions not only from the bookmakers, but from the Tote as well, it was considered that this contribution of £8 million to racing would make it a viable sport.
In Britain, there are four times as many betting shops as there are in France. There are no bookmakers in France or, if there are, they are underground. The Pari-Mutuel runs betting shops there, and there are 16,000 in this country compared with 4,000 in France. The betting turnover in this country is three times that of France, namely, £11 million as against £4,300,000. Those figures are startling in that the result is that our racing industry receives from betting only one-sixth of that received by France, namely £3 million to £4 million against £18 million. It is interesting that, although we have a higher betting turnover than France, the Chancellor in taxation in France receives £60 million whereas it is hoped to raise in this country £50 million. The money is required to go back into the racing industry for breeding and also to make racing more popular.
Since the 1963 Act racecourse attendances have gone down. There are three types of bookmaker. There is the on-course bookmaker against whom none of


of us have a grouse. He pays a fair whack to enter the various enclosures and for his staff. There is the off-course bookmaker, who has largely a credit account and whose business is mostly done by telephone. Finally, there is the betting shop.
If I remember correctly, the betting shop was introduced because the police did not want to licence runners, and we in this House wanted to legalise the half-crown bet by the small man. It was decided that the best way to do this was not to license the runner, but to license the premises. This system has grown much more than was thought likely when the Bill was passed. The result has been that attendances at racecourses have gone down and the money is not available to pay good salaries to the numerous people employed.
I commend the Bill. I think it is right. I am no enemy of the bookmaker; I like him. Our racecourses today would be less colourful if the bookmaker were not there. Racing is his livelihood—he could not make a living without it—and I think it is right that he should contribute towards that sport, the sport which we love so much.

9.44 p.m.

Mr. Arthur Lewis: I agree 100 per cent. with the speech of my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), and, like him, I have no interest to declare. I am not connected either directly or indirectly with horseracing, the betting fraternity or public relations firms.
It is a disgrace for this Labour Government to bring in such a Bill. The title is the Horserace Betting Levy Bill. With respect to you, Mr. Speaker, it ought to be called the Wigg Tax-free Subsidies to the Poor Millionaire Race-house Owners Bill. I want to show that that is what it is.
I do not understand the reason for all the crocodile tears which are being shed for the poor people who go racing. They do not have to go. The poor bookmakers do not have to go into their profession if they do not want to. In fact, it is the poor punters who pay.
I want also to explain presently—[Interruption.] I wish that my hon. Friend

who calls himself "Minister for Sport" would not keep up this constant stream of barracking, about which Mr. Speaker has had to tell him already—

The Under-Secretary of State for Education and Science (Mr. Denis Howell): Ridiculous.

Mr. Lewis: It is not ridiculous. I will give way to my hon. Friend if he has something constructive to say, but he should know that if he wishes to intervene, the proper way is to get off his backside to do it.

Mr. Howell: With respect, I was not making any interjection about the hon. Gentleman's comments. I was conferring with my hon. Friend about the nature of his opening speech and the reply that should be made to the debate.

Mr. Lewis: Mr. Speaker had to pull up the hon. Gentleman while—

Mr. Speaker: Order. We should come back to the levy, I think.

Mr. Lewis: Very well, Mr. Speaker. But if my hon. Friend wants to comment, I hope that he will rise to his feet to do so.
I cannot see the urgency for this Measure. I cannot see why it has been dragged in in this manner. Earlier today we discussed the Pensions (Increase) Bill. Evidently this Bill has equal priority. But what about the old age pensioners? Are they not entitled to some priority? We are told every day of the week that we cannot bring in this or that progressive Measure because there is not sufficient time—

Mr. Speaker: Order. In debating the Second Reading of this Bill, we cannot discuss other Bills that the hon. Gentleman would like to introduce.

Mr. Lewis: Yes, Mr. Speaker, but we can discuss whether there is a need for the present Bill and whether it should be brought in in preference to others which should have more priority.
There is no need for this Second Reading because there is no urgency for it, and there are other Bills which are more important. This is a Bill which is brought in to assist one section of the population, and other Bills which could be brought


in to assist the population as a whole are left out to make way for it.
The hon. Member for Bromsgrove (Mr. Dance) said that the Bill is not designed to benefit racehorse owners. I suppose it is intended for the poor working man who owns and controls racehorses. In reality, what it does is to increase drastically the tax-free subsidies to racehorse owners, and I want to say a word in a moment about the hon. Gentleman's statement that it does not mean much in extra subsidies for them.

Mr. Dance: Does not the hon. Gentleman realise that there are various rings on a racecourse? There is a cheap ring, a more expensive one, then Tattersall's and, finally, the members' ring. What I am in favour of is trying to ensure that conditions in the Silver Ring are made more comfortable and convenient for the very people to whom the hon. Gentleman refers.

Mr. Lewis: I will deal with that in a moment. It is true that some part of previous levies has gone for this purpose. But the fact remains that a big percentage has gone to the racehorse owners, and an even bigger percentage will go to them if this Measure becomes law.
What is the urgency for the Bill? I apologise to my hon. Friend the Under-Secretary of State for the Home Department for not being here to listen to his opening remarks. I am told that there is an altercation going on between the bookmakers and Lord Wigg about the legal rights and wrongs of the existing legislation. I should have thought that the people to decide the rights and wrongs in a legal argument were to be found in our courts. Let the parties go to court to decide who is right and who is wrong. I cannot see why we should waste our time arguing about bringing in a new Measure to give them extra simply because of some dubiety about the legal interpretation of existing legislation.
I never heard the Under-Secretary say who was really asking for this Measure. I apologise if he did mention it. Have the dock workers, whom I represent, asked for it? Has the Trades Union Congress asked for it? Has the Labour Party

asked for it? Have all those workers who go round knocking on the doors to get the voters out to get my hon. Friends and myself back in Parliament asked for it? Frankly, none of my dock workers, working-class supporters, trade unionists or Labour people has been urging me to get this Bill on the Floor of the House.
Was it discussed with the other members of the Horserace Betting Levy Board? Were they contacted and drawn into discussions? Were there negotiations with all interested parties, as is the custom with Bills of this kind? I do not know. I have heard nothing to suggest that this was done.
We have heard a lot about strikes recently. We have heard about the Post Office workers and the dockers going on strike unless they get extra money. Do I understand that the racehorse owners are threatening to go on strike unless they get extra money? If the racehorse owners have threatened to go on strike, when did they do it? Have they refused to run their horses? Are they so poor and penniless and in such dire trouble that they have to shut down all these big racing establishments? I have heard nothing to suggest this.
Are we to take it that these poor breeders and trainers are suffering so much from hardship that they have threatened to pack up? I have heard no such suggestion. I read in the Press last week, or it may have been this week, that one poor trainer had died and left £¼ million. That is not bad.
Will any of the workers in the horse-racing business get any of these tax-free moneys which are to be given to the racehorse owners?

Mr. Dance: Yes.

Mr. Lewis: The hon. Gentleman says "Yes".

Mr. Dance: Mr. Dance rose—

Mr. Timothy Kitson: Mr. Timothy Kitson (Richmond, Yorks) rose—

Mr. Lewis: I cannot give way to two hon. Gentlemen. Will the hon. Member for Bromsgrove tell me of any worker in the business, other than the racehorse owner, who will get tax-free moneys? I have the figure here. Money has been


spent on improving amenities and facilities, but the workers in the business have to pay their tax.
I come to the point that not all these people are getting huge prizes and tax-free moneys. I have a paper here. These are not my dockers or trade union workers. I have the names, and I can quote them. These are near enough all millionaires, or people in the millionaire class. They are certainly all Surtax payers. I will list the tax-free prize moneys that they have received. One man received £97,075 and another £18,270. The other prize moneys range between those two figures. I will not give the whole list. However, 25 of the top owners have had 31 per cent. of all prize moneys between them. This is all tax-free money which has gone to Surtax payers. I got one of my hon. Friends who is an accountant, or has some connection with accountancy, to work out how much a man paying Surtax will get if, in addition to his other income, he gets a State subsidy of £97,000 tax-free in one year. This is what is happening.

Sir Gerald Nabarro: In the Surtax range?

Mr. Lewis: Yes, in the Surtax range.

Sir G. Nabarro: It depends on the Surtax that he pays.

Mr. Lewis: I agree; nevertheless it is a lot of sponduliks, as the hon. Gentleman would say.
I was saying that this money is to be given to these people. It is, in fact, a game. I agree with the hon. Member for the City of Chester (Mr. Temple) that it is the taxpayer who is paying. Do not let us kid ourselves. I am not defending the bookmakers.

Mr. William Hamling: No?

Mr. Lewis: No. Bookmakers are taxpayers. I am not defending them specially. The taxpayer pays, or the punter, ultimately. It is the man who pays his money in the first instance from whom the bookmakers draw their money on which they pay the levy.

Mr. Dance: The hon. Member has been referring to the rich and lucky owners who own first-class horses. Has he considered the thousands of owners

of National Hunt jumpers who keep their horses in training and run them merely because of their love of the sport?

Mr. Lewis: I was going on to explain—as my hon. Friend did—that no one has to go in for this, whether he be a bookmaker or a National Hunt supporter or any other type of person. He goes in for it, I assume, because he loves the sport. All right, if he loves the sport let him pay for it. Many of my constituents love to go to football matches. They follow West Ham—one of the best teams—and they pay for it. [Interruption.] I thought that I should cause some barracking when I said that. I admit that there are some other teams which are not too bad. But the football supporters are paying for their sport, as are the cricket supporters, or the supporters of any other type of sport. They do not ask the Government to subsidise the sport.
I would not object to a tax on all forms of betting, gambling and gaming. It might be applied to all forms of sport. That might be a good thing, because there is a need to develop sport. I do not see why horseracing, just because some of us like it, should take precedence over greyhound racing, football, cricket or any other sport. If the poor man who runs his horses at National Hunt meetings cannot make both ends meet, there is no law that compels him to carry on.
Lord Wigg has said that he wants to double the allocation of prize money to £1,600 million. I do not see why the prize money should be doubled. Surely £97,000 for running a horse is sufficient, and surely 31 per cent. of the whole of the levy for the top 25 prizewinners is sufficient. I do not see why the people in the industry—whether it be my noble Friend Lord Wigg, or any other person connected with the sport—should share out the money derived from within the sport.
For my sins, I spend money on smokes. I thereby contribute my share of tax. If I have a drink I contribute to the tax on drink. Those people who produce the drinks and the cigarettes and tobacco cannot go to the Chancellor and say, "We are contributing so many hundreds of millions of pounds a year; we want to tell you how that money should be spent."


''No tear", the Chancellor would say, "I shall decide how the tax comes in. I shall decide what I tax. Having got the money in, I shall distribute it to the schools, health services and the various other forms of social welfare."
We may or may not agree with the Chancellor's methods of collecting the tax but we surely agree that taxation is right, and that it should be distributed as it is now. That is what I suggest in this case. If there is to be a levy, let it be on all forms of betting, gambling and gaming, and on all sports, and then let the Chancellor—not Lord Wigg and his Board, or even the Home Secretary—decide how the money should be distributed.

Mr. Kitson: The hon. Member spoke about his football team, West Ham. Would he not recognise that those who participate in the football pools make a very substantial contribution to football? Is this not similar to the contribution of the bookmakers?

It being Ten o'clock, the debate stood adjourned.

Ordered,
That the proceedings on the Horserace Betting Levy Bill may be entered upon and proceeded with at this day's sitting, at any hour, though opposed.—[Dr. Miller.]
Question again proposed, That the Bill be now read a Second time.

Mr. Lewis: I thank the hon. Member because he has made my point. Yes, a dock worker in my constituency may have his 6d. or 1s. on the pools. He puts on what he likes and no one makes him. He knows that there is a percentage, perhaps 33⅓ per cent., taken out, but the Chancellor does not then say, "You have contributed this amount and I would now like to ask you what I am going to do with it and whether you want to give it to West Ham or Southampton." No, he distributes that money to the various social welfare activities—

Mr. Kitson: Mr. Kitson rose—

Mr. Speaker: Order. We do not want too many interventions. Many hon. Members are waiting to speak.

Mr. Lewis: Mr. Speaker is giving me black looks. I cannot keep giving way,

but the hon. Member has made the point, that these people cannot say whether the money should or should not be ploughed back into the sport which they follow.
The hon. Member for the City of Chester proudly and rightly said how wonderful the bloodstock of the industry is. There is an argument here. It can be maintained that this industry earns us foreign currency in export and that we should therefore encourage it. I should like the Minister to tell us what is the balance of payments on the import and export of horses, and the loss or profit. Perhaps we are on the right side, but if this is a good argument, the same could be said of the gaming casinos, which I do not want to encourage—that they earn us hard currency from American visitors and others. Are we then to have a Bill to raise a levy to give money to the casino people? I hope not.
The Bill should not be hastened through the House. There are many objections to it which I hope, if the opportunity presents itself to get on the Committee, to make the subject of Amendments. We should not worry too much about helping racehorse owners. I agree that those who work in the industry should be helped, but they have trade unions to do that. If they have not, let them organise themselves into trade unions. There have recently been some improvements in the hours, wages and working conditions of the jockeys, stable lads, and so on.
I am all for helping them, but not for giving hundreds of thousands of pounds per year tax-free to wealthy racehorse owners, all of whom are well able to look after themselves and live well. All the big houses and estates at Newmarket rarely go on the market, because they are so expensive. But the racehorse owners live there and do well. I could not care less about the bookmakers. I believe that the bookmakers are in favour of the principle of the Bill. I am opposed to the whole concept.

Mr. Hamling: I hope that when we reach the Amendments which my hon. Friend intends to suggest in Committee we shall recall what he has just said.

Mr. Lewis: I do not know whether that was an innuendo. At this stage I have no Amendments which I want to


suggest, and in any case Amendments cannot be put forward until the Bill has had a Second Reading. All I am suggesting is that if something is to be taken from the punters and it is the punters who pay, I should like there to be a punters association putting forward punters' Amendments. Perhaps my hon. Friend the Member for Woolwich, West (Mr. Hamling), and I can set up an association to look after the interest of punters, because they are the people who ought to be consulted and who have not been consulted.

10.6 p.m.

Mr. Timothy Kitson: I had not intended to speak in the debate, but I have been incited to do so by the hon. Member for West Ham, North (Mr. Arthur Lewis). He said that no contribution made in any other sport helped that particular sport. I said that the football pools punter made a large contribution to football. The hon. Gentleman said that that money was taken by the Chancellor of the Exchequer, and he then avoided the question. I was making the point that one-third of the money put into the football pools is taken by the Chancellor and a third is put into the operation and part of the money put into the operation is handed back to football. If the hon. Member denies that that is the case, his information is incorrect.
It is all very well to talk about one racehorse owner who had a horse which last year won £97,000. I cannot imagine what was the cost to him of all the other horses which he had in training. The hon. Member for West Ham, North should go racing at Sedgefield and add up the contributions put into a day's racing by the owners and see what a race is worth to an owner at the end of the day. A winner might get £120, but 10 per cent. of that goes to the trainer, 10 per cent. to the jockey and probably 5 per cent. to the stableyard, which leaves the owner with about £70 out of that £120. It should also be borne in mind that only one horse in seven in training wins a race and that includes the six races at Sedgefield at £120 to the winner. It is nonsense to put every owner into the £97,000 category.
I agree that it may be wrong to boost those who are at the top of the sport, but there are many small men in racing.

If the hon. Member for West Ham, North rode the Grand National winner—admittedly we would have to alter the weights—I would be delighted to see that he got an additional prize to his 10 per cent., but the jockeys who go round the racecourses do not make a large living. If the hon. Member talks to the trainers in Middleham, he will find that they are not making a great killing in racing, are not making enormous profits, and anybody associated with training knows that to be so. People who work in the racing yards do a tremendously hard day's work for a very small return and any increase in the contribution made to racing by the Levy Board will help them.
Anybody who goes abroad on holiday is allowed to take only £50, but the Government allow us to have horses in training in France, if we are fortunate enough to be able to do so. To win a selling plate in France is worth £1,000, not £200, even at a small meeting. Nobody going on holiday is allowed to take more than £50 out of the country, but we are allowed to keep three horses in training in France, and the Chancellor of the Exchequer does not object. If an owner is wise enough to do that, and wins a selling plate in Paris or any other part of France, the minimum prize money is probably about £1,000, but if he wins one on a small racecourse in this country he probably receives about £200 or £300.
It is all right for the hon. Member for West Ham, North to produce a few figures about someone in the racing industry who makes £97,000 because he owns the winner of the Derby and the Ascot Gold Cup, but let us remember all those small people who own horses and give the punter a great deal of pleasure—

Mr. John Mendelson: The hon. Gentleman will have me in tears.

Mr. Kitson: There is no question of tears in this. What I am saying is that such owners are not making the enormous profits that the hon. Gentleman suggested. Bearing in mind that the Tote is paying its contribution on turnover, is not it fair to ask the bookmaker to do the same?

Mr. Arthur Lewis: My hon. Friend facetiously said that the hon. Gentleman


is making him cry. What I was trying to get over was that the poor racehorse owners, if there are any, do not have to go on if they keep losing money. I was trying to say to him that a worker on £15 to £18 a week has to go to work to live. He must carry on. He cannot say that he wants to contract out, because it is his living. But the racehorse owners do not have to carry on. They can pack up whenever they want.

Mr. Kitson: I am suggesting that it is sensible for the Levy Board to lift the stake money to make it comparable with that in France and other countries. The English owner is justified in sending a horse to France for training, but if our stake money were made comparable to that in France, as the Levy Board want, owners might be encouraged to keep their horses in this country.

10.13 p.m.

Mr. Marcus Lipton: On balance, I find it very possible to support the Bill. A certain amount of irrelevant argument and bucketfuls of sentiment have been introduced into the discussion, but the issue is very simple. In effect, the Bill tries to move the burden of the levy from the small bookmaker to the big man.
Hon. Members who have been following the history of the betting levy will recall that in the seventh levy, covering the period from April, 1968, to March, 1969, the minimum charge was lowered from £90 to £50. About 2,500 bookmakers benefited from that concession. In addition, when the Board decided to raise the figure at which a levy became payable, it was raised from £2,000 to £3,000 on net profits. As a result of the lifting of the ceiling to that extent, about 6,000 bookmakers do not pay the charge at all in respect of profits. In the sixth levy, the Board reduced the total sum it hoped to collect from £2·6 million to £2·3 million. It seems to me, therefore, the charge on the small bookmaker having been reduced, that it is necessary and inevitable that someone has to pay more if the total amount is to be collected. It is this which has caused the larger bookmakers bitterly to attack the levy scheme.
My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) drew

attention to the substantial sums of prize money earned by a small percentage of racehorse owners. He did not, for whatever reason I know not, mention the profits earned by the large bookmaking firms. I propose to remedy that omission, bearing in mind that the very people whose figures of profit I am about to give are the principal opponents of the Bill. The large bookmakers claim that they are being viciously victimised and deprived of a large portion of their profits. All we can do to test the veracity of that claim is to look at their published accounts.
In spite of a hazardous year, J. Coral Ltd. reported an increased profit for the year ended 30th June, 1968, of £46,000 over the previous year; the dividend was maintained at 75 per cent., and a 1: 5 scrip issue was proposed. In 1967 the William Hill organisation showed a profit before tax of £179,000—far exceeding the money collected in prize money by a handful of racehorse owners.

Mr. Sheldon: Will not my hon. Friend accept that the profits he is now mentioning provide a perfect case for an increase in betting duties to go to the Chancellor of the Exchequer rather than to racehorse owners?

Mr. Lipton: Not necessarily. My hon. Friend is an ardent worshipper of the Chancellor of the Exchequer and he wants to give him more work to do and more money to play with. I am content to leave the question of the horserace betting levy to the Home Secretary. One of the objects of the Bill is to make a Minister—in this case the Home Secretary—more accountable to the House than hitherto for the operation of the scheme. I can see no objection in principle or in logic to the proposition that a Minister—we can argue about whether it should be the Chancellor or the Home Secretary—should be made more responsible than is the case now for the operation of the betting levy.
Let me give one or two more figures coming from the William Hill organisation. I said just now that its profits before tax in 1967 were £179,000. In 1968 profits before tax were £402,000. I need give no more now than some figures coming from the Ladbroke group. The group's gross profits for 1968 were


£693,000 more than in the previous year—£1·8 million as opposed to £1·1 million.
Those figures for not indicate that in transferring the burden of the levy from the small bookmaker to the larger bookmaker we are imposing any real hardship or injustice.
The hon. Member for Bromsgrove (Mr. Dance) spoke of the growth of betting shops and the betting business. I was never in favour of betting shops, and I think it a great pity that the street bookmaker was eliminated. He rendered a public service at a much smaller cost to the community than the elaborate system which we are now seeking to operate.

Mr. Speaker: Order. We cannot debate that tonight.

Mr. Lipton: Reference has been made to an apparent flaw in the 1963 Act, and it appears that the bookmakers are claiming that the Levy Board is ultra vires in certain actions which it is taking. My hon. Friend the Member for West Ham, North wondered why the Government or the Levy Board did not take the bookmakers to court.

Mr. Arthur Lewis: I did not say anything of the sort. I said that they, whoever may be responsible, should settle the matter in court. In other words, I said that if legal action were needed to settle the matter, it should be settled that way.

Mr. Lipton: I do not see how a legal matter could be settled other than in court. If it must be settled that way, then why do not some of the wealthy bookmakers to whom I have referred take the necessary action against the Levy Board? If they believe that the Board is acting outside the powers which the House has vested in it, why do not they settle it by that means?
The eighth levy scheme will cover the period April, 1969, to March, 1970. The Bill proposes to increase the charge on turnover from 5s. to 10s. per £100. I do not understand how the hon. Member for the City of Chester (Mr. Temple), who I regret is not in his place, can argue that this represents a 65 per cent. increase. By comparing the estimated yield of £3·8 million with the estimated yield for the previous year of £2·3 million, one arrives at a hypothetical increase of 65 per cent. However, the Levy Board is here making

a concession to the bookmakers because it is increasing the figure before which the charge becomes payable on profits from £3,000 to £4,000. By this means we are helping the small man.
There will, therefore, be an increase in the total yield from bookmakers to give an estimated yield of £3·8 million, and the row boils down to the fact that under the eighth levy scheme about £1·2 million extra will be extracted from the largest bookmakers out of their turnover of £800 million. That, believe it or not, means that they are being asked to pay the extra very small amount of 0·15 per cent. How can the big bookmakers, whose profit figures I have quoted, object to an increase of this size?
The levy scheme was introduced on the suggestion and with the approval of the bookmakers. It would never have been introduced if it had not received their unanimous approval. Now they have changed their tune and object to the principle which the Government propose of shifting the burden from the small bookmakers, thousands of whom are not affected by the operation of the levy as proposed in the Bill, to the larger bookmakers, who will be asked to pay a little more out of their substantial profits. A case has not been made out against the Bill and I hope that the House will therefore approve its Second Reading.

10.25 p.m.

Mr. Fergus Montgomery: Most of my hon. Friends will find it surprising that I am speaking in support of bookmakers, because I like to have a bet, but I very rarely win. Bookmakers are like politicians, a friendless community; very rarely do they find anyone springing to their defence. In all fairness I must say that I am not happy about this legislation.
In 1961 Parliament passed the Betting Levy Act which decreed that the amount of levy should be related to the bookmaker's capacity to pay. The Act also included a safeguard in the form of the Bookmakers' Committee. According to the Bill, this is now being withdrawn because, as it says in the Explanatory Memorandum:
Clause 1 of the Bill transfers the responsibility for settling the annual levy scheme, in default of an agreement between the Levy Board and the Bookmakers' Committee to the Secretary of State.


I cannot help comparing that with the wisdom of Lord Butler, who was Home Secretary at the time of the Betting Levy Act. In the Second Reading debate on 5th December, 1960, he said that he did not want the Home Secretary interfering too much. He wanted to ensure that the Board should settle its own affairs. He said:
I believe that this is a sensible device for achieving that end. If there is disagreement about the amount of the levy or the means of collecting it, it does not seem to me that the Home Secretary is well qualified to resolve that …"—[OFFICIAL REPORT, 5th December, 1960; Vol. 631, c. 879.]
I cannot understand why the Home Secretary is trying to take this upon himself.
This levy is fixed by the bookmaker's turnover, and the hon. Member for Brixton (Mr. Lipton) pointed out that this amounts to 10s. per £100 of turnover. No account is taken of the bookmaker's capacity to pay. I disagree with the hon. Member. It is not the big bookmakers who are complaining. It is the small bookmakers, and it is the small bookmakers in my constituency who are incensed about this. These are the people about whom I am concerned. The bookmaker must pay a fixed levy on turnover and he must also pay 6 per cent. of his profits. Yet he is not allowed to deduct the levy from his profit before tax. [Interruption.] That is what I was told by the bookmakers who came to see me.

Mr. Handing: Ah.

Mr. Montgomery: The hon. Member for Woolwich, West (Mr. Hamling) says "Ah." It is left to the House to decide what that means. For some bookmakers this levy can make all the difference between making a profit or a loss. It could put some bookmakers, particularly the small ones, out of business.

Mr. Hamling: Mr. Hamling indicated dissent.

Mr. Montgomery: The hon. Member for Woolwich, West shakes his head, but I am told that there are dangers that bookmakers will be driven out of business, and I will elaborate this later.
If bookmakers are to have an extra levy placed upon them it is certainly true that most of this will be passed on to the punter. This point was made by

the hon. Member for West Ham, North (Mr. Arthur Lewis). It is always the punters who seem to pay, and this has dangers.
Lord Wigg made a speech about this in a debate on the Finance Bill on 2nd June, 1964. I do not always agree with Lord Wigg. In a debate on 5th December, 1960, he referred to my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) as "a Gladstonian Liberal." My right hon. Friend represents a constituency adjoining mine, and I am a great admirer of his. I doubt very much whether I should be if I thought he was Gladstonian Liberal. I do not really owe Lord Wigg anything because he owns racehorses—

Mr. Speaker: Order. The hon. Member will come to the Bill, I hope.

Mr. Montgomery: I was going to say that Lord Wigg has cost me money over a horse called Gout, which, I think, is very aptly named.
On 2nd June, 1964, Lord Wigg paid a tribute to my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) who, he said, had performed
… an act of great political courage …
when he introduced the present betting legislation. He said:
When it came up in the last Parliament, I did not believe that any Government would tackle it. But the right hon. Gentleman did, and it has been a very important step forward, and I pay my tribute to his courage in getting rid of not all but 95 per cent. of illegal betting."—[OFFICIAL REPORT, 2nd June, 1964; Vol. 695 c. 1013.]
Now the Chancellor proposes that we go back to square one. He is recreating illegal betting. It is illegal betting that will put the small bookmaker out of business.

Mr. Hamling: Mr. Hamling indicated dissent.

Mr. Montgomery: It is no good the hon. Member for Woolwich, West shaking his head. If bookmakers have to increase the deductions that they are making from the bets of punters this will result in the law of diminishing returns and a vast increase in illegal betting. People are tired of paying tax on their bets. They will be tempted to use street corner bookies again, who do


not have to pay tax on their winnings. If the hon. Gentleman were to go into any betting shop he would hear the punter moaning that he cannot win: if he backs a loser, he loses his money; if he happens to back a winner, part of his winnings are deducted in tax. If he can find a street corner bookie who will pay him his winnings in full, he is likely to use that man, and the man in the small betting shop will be put out of business.
I do not know whether I am being unduly cynical in wondering whether there is something more sinister behind the Bill. I wonder whether the aim is to obliterate the bookmaker and have a Tote monopoly, which would be a retrograde step. With bookmakers, there is at least a chance of getting better odds prior to a race. I speak with no axe to grind, because if ever I place a bet on a horse and accept the price of, say, 5 to 1, it is odds on that as soon as I have put my money on the horse it goes out in the betting. It is as though there were some secret system of saying, "Montgomery has put his money on. This horse has not got a chance" before the

race even starts. [Interruption.] Yes, like Gout, which was never even in the first three.
I hope that the Government will reconsider the Bill, because I should like to see racing made as attractive as possible. I do not agree with some of the arguments which were advanced by the hon. Member for West Ham, North. It is important that better prizes should be offered in Britain. It is rather tough that British animals are going over to France, as my hon. Friend the Member for Richmond, Yorks (Mr. Kitson) pointed out, where the prizes are so much more attractive. Those who are interested in horseracing in Britain want to see the best possible animals racing here and want us to make horseracing a sport which will give great pleasure to many people. I should like to see the levy fairly administered. I hope that the Government will have second thoughts, that regard will be paid to bookmakers' ability to pay the levy, and that bookmakers will be allowed to retain the safeguards which were so carefully written into the 1961 Act.

10.32 p.m.

Mr. William Hamling: The hon. Member for Brierley Hill (Mr. Montgomery) said that he is a friend of the bookmaker. I do not know which bookmakers in his constituency he has spoken to. The only bookmaker in my constituency to whom I have spoken is a small bookie, and he supports the Bill. The only people who have mounted a lobby against the Bill have been the organised bookmakers led by the big ones. It is not the punters who have lobbied us against the Bill. My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) mentioned his constituents. I wonder how many of his punters have lobbied him against the Bill. The only letters I have received on the subject have been from the bookmakers' lobby against the Bill. My post has been full of letters in the last week from these people.
I am surprised that the hon. Gentleman did not notice what my hon. Friend the Under-Secretary said about the effects of the eighth levy on the small bookmaker. My hon. Friend gave the facts, which have not been controverted in the debate. I shall not weary the House by repeating the figures my hon. Friend gave. They can be read in HANSARD.
The street bookie lays his bets off with another bookmaker, who pays the tax. Therefore, indirectly the punter pays the tax. Let us not kid ourselves about betting. The punter pays. He bets knowing that he will pay but hoping to win.

Mr. Mendelson: The punter pays every time.

Mr. Hamling: That is the purpose of the exercise. Some hon. Members do not know much about the facts of life for the ordinary punter and the ordinary constituent whom they represent.
What I am concerned with, however, is that it is the small bookmaker who should be kept in business. It is the small bookmaker with whom my constituents bet. They do not bet with the big boys, with Ladbrokes. They bet with Lewis, of Woolwich. [An. HON. MEMBER: "Arthur Lewis?"] No connection with the old firm from West Ham. Lewis of Woolwich is a well-known bookmaker

whose father was in business 40 years ago. He is the small bookmaker whom the levy will assist.
The people who have been putting the small bookmakers out of business in recent years have not been the Levy Board. The people who have been buying the betting shops and putting the small bookie out of business, the people who have been forcing their rules upon the small bookie, have not been the Betting Levy Board. The people who have been cutting the odds for places have not been the Levy Board. It is the big bookies, meeting in conclave at New-market behind closed doors, making their own rules. They are the people who are ruining the small bookmaker, and they are the people who are hitting the small punter.
Let us have no hypocrisy from some of the bookmakers' interests behind the opposition to the Bill. The fact is that without horse racing, betting could not go on. Do we want to encourage off-course betting or on-course betting? Surely, the purpose of the Bill is to increase the attractiveness of on-course betting. That is healthier all round. It is healthier also for the Chancellor of the Exchequer, for whom my hon. Friend has so much unnatural affection.
The Bill has been brought in because the bookmakers failed to agree on a scheme. That is the simple answer. They wanted to sabotage the Betting Levy Board because they wanted to rule this industry. The big bookies want to rule this industry. They are not making £80,000 a year, oh no. They are making vast fortunes. Cecil and John Moores are not making £80,000 a year and contending that they have much affection for the small punter—only because he is a mug. That is the only affection they have for the little punter. So let us not waste many tears over people like that.
This industry also—and this should commend itself to my hon. Friend—provides a great deal of revenue for the Exchequer. It is, therefore, in the interest of the Exchequer and of the country that it should be healthy. That, again, is one of the purposes behind the Bill. No doubt, my hon. Friends heard the broadcast last Saturday about the recent November bloodstock sales at Newmarket which indicated that a great deal of


money was coming to this country from the export of bloodstock. Without the horseracing industry, that valuable export is threatened, as it has been for years, but the Bill will help this important export industry.
I do not know whether that is a view which commends itself to some of my hon. Friends who seem to have some inverted puritanism about horseracing. They seem to take a rather shame-faced attitude towards this industry, which employs a great many people and gives a great deal of satifaction to thousands—millions—of people. What is wrong in that? I never go to a race meeting, but I take a great deal of personal interest in other industries which, perhaps, do not have an altogether high moral tone. I think of drinking a glass of beer. That may be a harmless amusement.

Mr. Sheldon: My hon. Friend has talked about hon. Members taking a Puritan view—

Mr. Hamling: An inverted Puritan view.

Mr. Sheldon: I will not quibble about words. I hope my hon. Friend was not referring to me, because I said quite clearly that the Government ought to be neutral in this matter, as they ought to be neutral on the question—my hon. Friend referred to drinking—whether people drink or do not drink. But nobody is saying that certain people should receive money for drinking, and I believe the Government should not be suggesting that they should not be neutral in this matter, and not hand money over from one section of the community to another section.

Mr. Hamling: I have already dealt with my hon. Friend's point about the neutrality of the Government in this matter. How can the Government be neutral about an industry which brings into the Exchequer many millions of pounds a year? How can we be neutral about an industry which employs thousands of people?

Mr. Sheldon: The drink industry employs more.

Mr. Arthur Lewis: Will my hon. Friend allow me? I must declare an interest: there is a greyhound track in

my constituency. But there is a great number of greyhound tracks, and tracks which are getting into difficulty. Neither Lord Wigg nor anybody else has suggested they should get some of this money. If it is right and proper for one, why not for the other?

Mr. Lipton: Have a greyhound levy board.

Mr. Hamling: Yes. I hope my hon. Friend, with his interest in these matters, will promote a Private Member's Bill to promote them.

Mr. Arthur Lewis: Let the Government do it.

Mr. Hamling: Why should the Government do something he disapproves of? Why the Government should do what he is now suggesting I do not know.

Mr. Arthur Lewis: Treat them alike.

Mr. Hamling: My hon. Friend thinks we should treat everybody alike. Obviously, this House takes a great interest in all forms of taxation, in which this House ought to take a great deal of interest, and we ought to do our best to see that the goose which lays the golden eggs is not killed, as, indeed, it would be killed if this Bill were not carried and if the Betting Levy Board disappeared. These are points of importance to the nation. Obviously, without the revenue which we get from these amusements, harmless, no doubt, we could not assist the old-age pensioners in whom my hon. Friend affects so much interest.

Mr. Arthur Lewis: Oh, really.

Mr. Hamling: Let him read what he said in his speech. He said these are things we ought to be concerned about and that without the money from the tax on this industry we would not be able to afford a great many of these things.

Mr. Arthur Lewis: No.

Mr. Hamling: The fact is, and the House knows it very well and the country knows it very well, that attendances at race meetings are declining, and they have been declining for a long time. A great many race meetings have ceased, and will cease.

Mr. Brian Walden: A good thing.

Mr. Hamling: A good thing, says my hon. Friend. All right. In that case he ought to carry placards saying "Down with racing", "Close Newmarket", "Close the lot".

Mr. Walden: When I said it was a good thing that certain race meetings had declined I did not mean I was hostile in any way to racing, but I think it is a very good thing that its structure should be rationalised, and that the Levy Board should not pay money out to uneconomic courses, but to courses which have some chance of giving a return on the money which is paid out.

Mr. Hamling: All I can say to my hon. Friend is that I hope that in that case he will vote for this Bill, which will give the Betting Levy Board more power than it now has. That is the answer to that one.

Mr. Walden: We shall see.

Mr. Hamling: No doubt we shall see. No doubt we shall see when the Committee stage is reached.
This industry is declining because revenue from racecourses is declining, attendances are going down. The Betting Levy Board, under the able chairmanship of my noble friend—I do not see why we should not say that—is taking great steps to increase interest in racing and taking great steps to improve attendances and so increase receipts.
One of the most important things is to increase prize money. Whatever some may say about wealthy racehorse owners, prize money at race meetings in this country compared with abroad has for some years been declining. One has only to look at the number of runners in some important races to know that it is not worth while sending horses. The purpose of the Levy Board's operation is to reverse that trend and to make it more worth while. [An HON. MEMBER: "To have more race meetings."] To have more race meetings, yes, and to improve the racecourse facilities. This exactly is the policy of the Levy Board, but unless the Bill is passed the Board will not be able to carry out that policy.

Mr. Richard Buchanan: I do not know very much about the Bill, but, as is my habit when

a Bill comes out, I have made a cursory examination of it to see whether it interests me. One fact I came across is that there are more racecourses in Britain than in the United States of America. To talk in terms of more race meetings might mean that the levy would be wasted on subsidising tracks not now in existence.

Mr. Hamling: That may be so; it may be that there are certain uneconomic racecourses. I hope that my hon. Friend will now take a little more interest in the operation of the Betting Levy Board. If he were to study the facts, he would know that the Board has been trying to rationalise this process and will continue to do so, and that the purpose of the Bill is to help the Board to do precisely that.
May I add to what I said at the beginning about bookmakers? Small bookmakers have for some time been going out of business, as it is not profitable for them to continue. I quoted the case of one of my constituents. He is closing one of his betting shops in Erith and Belvedere because it is not economic. It is uneconomic under the rules that have been made not by himself but by the big bookmakers, who are driving people like him out of business. The bookies' rules are dictated by the arbitrary decisions of the big bookies, and I hope at some stage, Mr. Speaker, we may be able to discuss the Bock-makers' Afternoon Greyhound Services Ltd., which is an unofficial organisation set up by the big bookies to make the rules for the small bookies and to put them out of business.
I hope that the House will take a realistic and factual view of the Bill and carry it overwhelmingly.

10.48 p.m.

Mrs. Jill Knight: I have never run a racecourse; I have never had any particular knowledge of the bloodstock industry; I have no bookmaking interests, and I am a pretty poor punter; any bookmaker who relied on me for his daily bread would soon be drawing National Assistance; but I have received many letters from bookmakers in my constituency. I have been to see them and I have listened to their case. It makes no difference to me whether a constituent


of mine is a bookmaker or a bootmaker; if he feels that some unfairness is bearing upon him as a result of legislation from this House, then it is up to me to intervene on his behalf.
I was impressed with one extraordinary result of the argument of the hon. Member for Woolwich, West (Mr. Hamling). Having hammered away at the bookmakers, poured scorn on the large firms of bookmakers and totally destroyed their characters, he thundered, in a way which no doubt at one time had his charges trembling in their desks, "It is the punters who pay." If it is the punters who pay, is he saying that the bookmakers, whose character he formerly blackened, are so altruistic that they are making all this effort to have their case put although they are not hurt by the Bill because the punters pay? I was so impressed by the case that bookmakers made to me that I feel that they have an argument which should be put forward. The hon. Member for Brixton (Mr. Lipton) is wrong in thinking that only the big bookmakers are worried about the Bill. Many small ones have written to me.
It is most important to make it clear that the bookmakers have never opposed the principle of a levy. The Minister made a brief reference to that fact, but another hon. Member said later that it was no part of this Parliament's job to tell the bookmakers that this was something that they should do. There is no need to tell them. They have never opposed the idea of a levy. In 1956 they co-operated with the Jockey Club on a committee to discuss the financial structure of racing. Two years later, off their own bat, they started the Racecourse Amenities Fund to provide financial assistance, on a voluntary basis, from off-course bookmakers. They co-operated with the Home Office in the introduction of the 1960 Betting, Gaming and Lotteries Act. They also sent a representative to the Peppiatt Committee, which later paid tribute to the fact that the bookmakers had never been against the principle of a levy.
My hon. Friend the Member for Brierley Hill (Mr. Montgomery) quoted from the speech by the Home Secretary on 5th December, 1960. In the same speech, the right hon. Gentleman made it clear that the bookmakers agree with the

principle. But what they have always said is that their agreement was conditional on adequate safeguards for bookmakers, and that seems to be perfectly fair.
There is no doubt that if a system is created without adequate safeguards the result will be to force thousands of bookmakers out of existence, and one of my hon. Friends referred to the illegal betting that might result from that. But those hon. Members who think that it is not the case that bookmakers would be forced out of business by this legislation need only look for a moment at the contributions which bookmakers have made since 1962–3, when the system began.
In 1962–3, the amount from the bookmakers was £892,617. From that figure, it shot up to over £2½ million in 1967–8. That is a very big jump—

Mr. Hamling: Will the hon. Lady now quote the figure that an individual bookmaker paid under the seventh levy and how much he will have to pay under the eighth levy?

Mrs. Knight: If the hon. Gentleman is attempting to suggest by that that the bookmakers have had no objection to the seventh levy, he is wrong. He should do his homework rather better before suggesting that.
From £2½ million, we are told that in April of this year the amount will be increased to £3,800,000. At one stage, the Minister threw some doubt on that figure. When pressed, he said that it has not been said that that figure will be imposed. I do not know from where he imagines the various authorities who have quoted the figure got it, but I have a cutting from the Birmingham Post of 12th December of last year which says:
This year, from April, 1969, bookmakers' contributions will be raised to £3,800,000.
The Birmingham Post did not make up that figure. There must be a reason why it stated that figure. I noticed that the Minister did not say that it would not be raised to that figure.

Mr. Elystan Morgan: I think that it would be of assistance to the House if we were to clear up this matter. A scheme has been proposed by the Levy


Board; but if the Bill is passed, under Clause 1(4),
A scheme determined by members of the Levy Board for the levy period beginning with 1st April 1969 shall not have effect unless confirmed by the Secretary of State, who may in confirming it direct that it shall have effect with such modifications as he may specify.
I ask the House to remember that it should not take for granted that the Home Secretary either will or will not confirm the scheme about which we have heard.

Mrs. Knight: I have no doubt that members of the bookmaking fraternity and the whole of the racing industry will be very interested to read what the Minister has just said. Nevertheless, I am sure that he will not quarrel with me when I say that there is widespread well-founded belief in the industry that that is the figure. At all events, what started off as a fair contribution has gradually become an intolerable burden.
In one of the less lucid passages in the speech of the hon. Member for Woolwich, West I fancy I heard a reference to a golden goose. I think that wise Chancellors realise that it is better to let a goose live and collect the golden eggs than kill it off and face empty egg-cups, particularly when the eggs are worth about £2 million to £3 million. This could well be the result. If we tax too heavily we may kill the golden goose.
Over and above the point about how much levy should be extracted is the burning question of the arrangements made to fix that sum. Is it not fair that the bookmakers should have the right to adequate safeguards? I do not think that Parliament would ever have agreed to authorise a levy or set up a Levy Board if it had thought there were to be no adequate safeguards for the bookmakers as a result.
Ability to pay has, until now, been the yardstick. The Minister said: "Who can say what is ability to pay? It is a loose term." So it is, but a loose term is better than no term at all. If we have it clear that ability to pay is recognised, that is one thing. But to wipe that out altogether and not even pay lip-service to the fact that, to be fair, we must recognise ability to pay and consider it, is going a bit far.
The Bill deletes the provision which established this principle. With effect from 1st April, 1970, Section 27(5) of the Betting, Gaming and Lotteries Act, 1963, is repealed. With the repeal of this section will disappear the only real safeguard that bookmakers have so far against excessive demands.

Mr. Hamling: No.

Mrs. Knight: There is no question about it. This is what they believe, and I cannot see that they are not correct. It appears that the Government, by destroying this principle, are not only telegraphing their intention that more money still should be extracted but indicating that they care not a jot whether ability to pay is there or not.
If the levy is so much and the bookmakers cannot pay, what happens? They default in payment, they lose their permits and go out of business. They do that in just over three months. If they have defaulted for a period of more than three months previously they are out of business in no time at all. I am worried about that.
I am also worried about the suggestion that it is right to base tax on turnover, not on profits. That is rather a worrying theory.
The Explanatory Memorandum twice mentions the right of appeal. It states:
The Bookmaker has a right of appeal against his assessment to an appeal tribunal established by the Act.
A little lower down in the Explanatory Memorandum, on Clause 2, it says:
The existing right of appeal remains unaffected.
It does not seem to have cheered the bookmakers that this is in the Explanatory Memorandum. I am not surprised at that, because there is only one occasion in the whole of the Bill where the word "appeal" is mentioned, and that is in Clause 2, where it says that certain parts of the Bill, dealing with the appeals tribunal
shall not have effect in relation to the levy period beginning with 1st April".
It is probably on that basis that the bookmakers who have read the Bill are concerned.
I have listened to what they have said, and I understand their concern. I am not speaking for the large groups of bookmakers but merely making the point to


the hon. Gentleman that there is genuine concern, and at the moment we honestly do not know—having listened to the various interpretations of the Bill—whether it is the wolf or the grandmother.

Mr. Elystan Morgan: It might save misunderstanding if I point out that Clause 29(1) of the Betting, Gaming and Lotteries. Act, 1963—which spells out the right of appeal—is not affected by the Bill.

Mrs. Knight: I was aware that the Bill must be read in conjunction with the other Act, but I put it to the Minister that the worries that I have been voicing to him are genuine and are felt by men who are concerned about their livelihoods. It may be that they are wrongly concerned and that everything will be fair and that we have the grandmother and not the wolf, but I hope that the hon. Gentleman will take care to make it clear to these worried men which of the two it is.

11.2 p.m.

Mr. Brian Walden: On Monday I spoke to a number of bookmakers and also certain representatives of the industry, and said then that I was speaking on request, in the hope that I should not have to speak in this debate. I have heard this debate from upstairs and I have not wanted to intervene, for reasons that I shall explain, but have now found myself in the unfortunate position of having to do so.
I did not want to intervene for a number of reasons, principally because throughout the 1964–66 Parliament I was the P.P.S. at the Treasury. As time goes on it becomes increasingly difficult to remember what one is supposed to remember for public discussion and what one is supposed not to remember. A P.P.S. is not privileged in respect of Government secrets, but, necessarily, he gets to hear things and has old friends and does not want to offend them. I have had a very careful think about the Measure, and nothing that I say is in any way a breach of confidentiality.
As briefly as possible, and without any technicalities, I want to say some things which I hope will be examined in detail in the Committee—of which I hope to be a member.

Mr. Lipton: Canvassing!

Mr. Walden: That remains to be seen. First of all, nobody should attack the Betting Levy Board for its general aims, purposes and operations; they are excellent. I do not want to go into all the social and economic changes that necessarily meant—after the Second World War—that the nature of the ownership of racehorses and the attendance at race courses were bound to change also, after the initial post-war boom. That criticism was made by the present Chairman of the Betting Levy Board. He suggested, as others have, a number of reforms, which have now been carried out by the Board.
In an interjection in the speech of my hon. Friend the Member for Woolwich, West (Mr. Hamling)—who is not now present—I said that there should be fewer race meetings. I said this not in any spirit hostile to the sport of horse-racing but because of my belief that Britain still has too many racecourses and that some are uneconomic and should be closed, and that the benefits should go elsewhere.
I must not say too much, but I have no reason to suppose that the Levy Board—and certainly Her Majesty's Government and the Minister of Sport, whom I am glad to see sitting there—would necessarily want to contradict me on this point.
So I am a strong supporter of the Levy Board—let that be clear. However, I am uneasy about this Bill, first of all because I am not sure that it is viable financially. In a Second Reading debate I do not want to weary the House with the figures, but a lot has been said about large and small bookmakers and a good deal about the difference between different levy schemes. Although I have always regarded the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) as totally charming, I never thought I would agree with her as strongly as I did when she said that it is the small bookmakers who are making very serious complaints against this Measure. That is absolutely true.
I will not weary the House with the reasons, which we can examine in detail in Committee, but if these gentlemen are right in the complaints they are making and if they are going to be either driven out of business or, even worse,


forced into illegality, that is a serious matter for this House.
As some hon. Members know, I have lived in and have some experience of the United States of America, and one of the worst features of the United States is the nature of her gaming industry. Virtually all bookmaking is illegal, and the effect is to put bookmakers into the hands of racketeers. It was never as bad in this country, but it was the case in this country when I was a boy and often carried betting slips, as I have told the hon. Member, that betting was wholly discriminatory. It was perfectly reasonable for a wealthy man to place his bet but it was demeaning for the working class. Many of the bets made were illegal. There used to be a set arrangement between the police and the street bookies. The police would pinch them at a given time and they would be fined a regulated amount which would be paid by the bookmakers to the runners. The whole thing was utterly demeaning and wrong.
Many of my hon. Friends with greater experience than I in this House fought against that, and we changed it, and the bookmakers themselves have done everything they can to drive the fly-by-nights and welshers out of their own profession. I do not want to see us do something which will put financial demands on the small man which will be an inducement to him to go back into illegality.
I do not want to over-dramatise it. I do not say that we could or would reproduce the American situation. But I do say that it is a bad thing that any legitimate bookmaker should be given the idea that it would be wiser for him if the majority of his business were carried on illegitimately. That would be a very bad thing, and I have honest doubts about the financing of the Bill we are being asked to consider on that very point which can better be argued in Committee.
I assure the House that I speak after some study and with some knowledge of this matter. I have had figures quoted to me about the eventual amount which the Levy Board intends to raise—the hon. Member for the City of Chester (Mr. Temple) nods—which are not mentioned in the Bill or in any brief that the Minister has. I regard that amount as unrealistic and potentially dangerous.
Let me switch from that point to something which is out of fashion but which concerns me just as much—the question of honour. The arrangement which we now have was set up on the basis of certain safeguards. We are all adults and we all live in the real world. Nevertheless, I am one of those who believe that words are not light, that they are things that men live by. To give words and not mean them is to destroy the whole basis of the trust which exists between individuals and between Governments and citizens.
The bookmakers are not a very beloved faction. They must be one of the most lightly regarded minorities in the country. As every other speaker has done so, I suppose I should say at this point that I have no connection whatsoever with the industry, either financially or temperamentally. Apart from an occasional bet on the Derby, I do not bet. Nor do I regard bookmakers as being in any way specially favoured or privileged members of society. But they fulfil a function.
They co-operated with this levy legislation on the basis of guarantees and safeguards. It is very easy to say that Parliament is sorry; of course it is. If we like, we can execute all red-headed men on Monday—we can pass a Bill to that effect. It is all very well to say that the bookmakers misunderstood, should have been wiser, should have been more properly advised, should have been told that we can vary legislation whenever we like.
The fact remains that the Bookmakers' Committee has worked very well and honourably and with decency. It has worked this scheme, which I regard as very desirable and which I frankly say I should have imposed had it been my responsibility. But the bookmakers have worked with it on the basis of safeguards. I am bound to tell the House that the safeguards which they accepted, the safeguards on which they offered to co-operate, are not retained by the Bill.
That is the plain fact. It may be that my way of looking at it is wrong and I am anxious to be so persuaded. I come to the discussion with some reluctance and anxious to be persuaded that I am not seeing the issue clearly and that there is an aspect of the case which I have


misunderstood. However, I want quickly to recite the safeguards which are now gone.
The bookmakers understood that they would operate the levy scheme on the basis that there would be two independent members who, with the Chairman, would deride issues in dispute. That has gone. It will now be the Chairman and two members appointed by the Home Secretary to look over the whole field, which is very different. They understood that they would have that independent safeguard which the House of Commons now proposes to remove from them.
Their position in respect of the licensing justices has been varied. If over a period there are two of the offences cited in the Bill, licensing justices will be required—it will be obligatory—to withdraw a licence. That was not the previous position. That was not the guarantee when the bookmakers agreed to cooperate.
Another important change is that responsibility for determining bookmakers' contributions has been transferred from the Bookmakers' Committee to the Chairman and the members of the Levy Board. This is a most important matter for members of the profession. I cite a document with not all of which I agree. Indeed, I have a good deal of objection to the way in which it handles some issues and, as always, I think that I could have done better. The document has been distributed by the bookmakers. I completely agree with it when it says that there is one section of the present Act which provides that in the event of a dispute between the Levy Board and the Bookmakers' Committee about the amount to be paid by the bookmakers, the three independent members of the Board when determining the scheme shall be required to consider and compare the extent of the need for the time being for the contributions, the capacity for the time being of bookmakers to make contributions and the capacity for the time being of the Totalisator Board to make contributions. The document says that the repeal of this section will destroy the only real safeguard the bookmakers have so far had against excessive demands.
On behalf of a section of the community which none of us especially loves,

I am bound to say that that is true. If we pass the Bill, which has a desirable purpose for a desirable body to do good things for a sport, none the less people to whom the House of Commons, or a previous House of Commons, has obligations, to whom it gave promises and safeguards and with whom it made arrangements, will find that all those things are to be taken away.
Because this is the real world, I do not pretend that the Government and the Levy Board or the Home Secretary and the Levy Board and the bookmakers will not still have contacts. I accept that. But I am getting slightly tired of the House of Commons entering into pledges to individuals which it subsequently decides are inappropriate and inapposite and are much better wriggled out of, usually without the slightest consultation beforehand. I beg the House not to do anything at this stage, but when the Bill reaches Committee stage to give close consideration to these points. I regard the safeguards for the bookmaker as inadequate.
It is no secret that many people in the country believe in a tote monopoly. The answer of some people to any inquiry about bookmakers is: "It doesn't matter whether they can pay the levy or not. If they cannot, they will lose their licences and that in the end will be extremely good and we can go to the system in France where they have the pari-mutuel, and we can have a Tote monopoly, which would be excellent."
My only comment is that that was not the arrangement which the previous Conservative Government or the present Labour Government made with the bookmakers. It was not the criterion under which discussions were held. If that was the belief, it should have been stated. I am against the insidious bit by bit introduction of principles not clearly stated in the first instance.
I am told sometimes that it is clever politics. I do not want to know about that kind of clever politics. We entered into an obligation on the basis that the bookmaker would not be eradicated, that there would be no question of a Tote monopoly and that the bookmaker's interests in this should be considered. The Government are obliged to take note of that.

Mr. Kitson: Nearly everybody who takes an interest in the racing industry will recognise that the bookmaking industry offers, by the size of the bets it is prepared to accept, a service to the punting public which the Tote does not. For many of us with an interest in racing, the day the Tote raised the minimum bet from 2s. to 4s. it was writing itself off for all time as a racing monopoly. It is not fair to those on the benches opposite or on this side of the House to say that we should like to see the elimination of the bookmaker, whom all of us enjoy seeing on the racecourse. Those of us who have raced in New Zealand, South America and other parts of the world know the lack of interest when the bookmaker is not on the course.

Mr. Walden: I agree. I did not say that any Opposition hon. Member wanted the eradication of the bookmaker or a Tote monopoly. But the hon. Member knows who has said that; if not, I should be happy to tell him who has. It is bound to create in the minds of some of us the impression that it is not always the bookmakers' interests which are considered and that it is not always established that there must be a balance between the punters who choose to bet with the Tote and those who choose to bet with bookmakers off the course and on the course. One is bound to have some regard to things that have been said and written, to the plain implications of the statements of certain people. The House should have regard to them, particularly in view of the way in which the Bill has been introduced. I accuse neither side of wanting a Tote monopoly, but simply say that some people do, and that we must weigh the concern for guarantees that have been given against their perfectly legitimate, honourable and sincere view that a Tote monopoly would be better.
I have one last point about owners. This question has been a bone of contention throughout the debate. Of course, it was right to move money towards the owners because of the changing nature of ownership, the fact that increasingly it became syndicated, that we could not depend on a small group of rich men to sustain the Turf as it had in the days of a very differnet level of taxation, when horseracing was a very different game, in a different social climate.
The House must also have regard to some other factors. I have great respect for the hon. Member for Richmond, Yorkshire (Mr. Kitson). He and I must go through the list of winning owners some time. I will look up what they have won, and then privately—because I would not say such things in the House about any individual—estimate the fortunes of the leading 50 or so owners. I have some hesitations about the proposals. We are transferring money from the bookmakers, which is right, to the sport, which is right. We are choosing to do it by subsidising owners, which is right. But I am not sure that we are subsidising the owners that we should be subsidising. I am not sure that in a period when the whole country must exercise considerable restraint we can justify the payments that are being made to certain individuals.
Essentially, what I rose to say was "Beware. Do not let us have the scene we had to endure yesterday of a general accolade of praise for something that was dubious. Hold back on this." The Bill must get a Second Reading, but I hope that the Standing Committee will have the closest possible look at it and that we shall have the issues of principle as well as finance investigated. Slight though the Bill is in its general effect on the country, its effect on the way the House conducts its business and the pledges it gives is serious indeed. I hope that the House will treat it as serious.

11.23 p.m.

Mr. Antony Buck: We have had a fascinating debate. I have been amazed by the tremendous knowledge displayed by hon. Members on both sides on every aspect of the racing business.
Another expert, my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton), should have been with us tonight, but, unfortunately, important official business keeps him away. He played a distinguished part in the passage of the parent legislation through the House. He tells me that it had been suggested to him that the Bill was a conspiracy between the Wigg and the Tories, and authorises me to say that any such suggestion is not correct, and that he has had no consultation with the Chairman of the Levy Board about this matter. Our attitude to the Bill at


this stage is one of vigilant neutrality, an attitude somewhat similar to that expressed in the knowledgeable speech of the hon. Member for Birmingham, All Saints (Mr. Walden).
The parent Act was introduced about eight years ago by Lord Butler, as he is now, who said in introducing it that he recommended it to the House and that he hoped that the political and sporting instinct of the House would cause hon. Members to support it. That is what happened, and in due course it was given its Second Reading with the support of the Labour Front Bench. There was a debate which my right hon. and learned Friend the Member for Huntingdonshire described as having an agreeable atmosphere. The same can be said of our debate tonight; there has been an agreeable atmosphere, with much knowledge shown on both sides.
In passing the original Act, Parliament was indulging in, and causing there to be, what can be described as a great experiment designed to help the splendid national sport of horseracing, a business of great importance for this country, with the valuable export element of which hon. Members have spoken.
The experiment got off to a fine start largely through the great work done by Field Marshal Lord Harding, the first Chairman of the Board. It is appropriate on this occasion to pay a tribute to the work which he did in his six years as Chairman of the Board. That work has been rightly described as both understanding and decisive, giving decisive leadership to the Board and to the horse-racing business generally. It helped very much in the early days.
It seems to me—and I am told so by those much more expert than I—that the experiment has, on the whole, been justified by many of its results. One has only to look at the latest Report, the Seventh Report of the Board, to see that there is much to commend it to the House and anyone interested in and concerned about horseracing and the bloodstock industry generally. Two matters in particular gave me satisfaction. One was the completion of the first phase of the development and impovement plan at Newmarket, I hale from that part of the world. I know that it was badly needed, and I am glad at the progress made.
Second, in the absence of my right hon. and learned Friend the Member for Huntingdonshire, I mention the gratification felt in that area—near my own home area—at the fact that there has been a proper grandstand provided, as illustrated in the Report, at Huntingdon racecourse. Clearly, the smaller racecourses have not been neglected. There are other matters giving cause for satisfaction—the provision of the veterinary field force, the forensic laboratory at Newmarket, and the progress made with security—all contributed to by the work of the Board.
In many ways, the experiment has shown itself to be a success, doing great service to racing generally. There is the concern, referred to by my hon. Friend the Member for the City of Chester (Mr. Temple) and other hon. Members, at the fall in attendances at racecourses, but, on the whole, one sees a good many pleasing features.
It is reasonable, after about eight years, that the Government should consider what alterations are needed in the scheme, and we have no objection in principle to amending legislation. We realise that there have been difficulties, as the Under-Secretary of State said in the cogent speech with which he opened the debate. But the Bill reverses certain of the decisions taken in implementing the original Act. In particular, it reverses the decision as to who should have the last word in deciding the total amount of levy to be paid by bookmakers and the Totalisator Board.
The decision made in 1960–61 by the Conservative Government, and the House as a whole, I think, was that one wanted the industry generally, including the bookmakers, to help itself by making its own arrangements. That was one of the reasons why the Levy Board was established and why the matter was left, in essence, to what might be described as the "Three Wise Men".
Another reason was that it was thought doubtful that the Home Secretary or his advisers in the Home Office had the expertise needed to make the required decisions, that they had not the time or opportunity to delve deeply into the affairs of the bookmaking business and the intricacies of the operation of the


Tote, with all their ramifications, it is said now that, before reaching decisions, they will have to consult those best qualified to advise them, including racing interests and, in particular, the Levy Board. If they do that, we shall virtually be back to square one and the 1961 Act.
The Home Secretary is now to have the responsibility of approving levy schemes, and we have doubts about this. In this connection, I asked in an intervention during the Under-Secretary's speech whether the Home Secretary would have the final word as to the amounts to be paid in any scheme and the detailed operation of the scheme. My hon. Friends believe that there is a strong case for saying that any such scheme should be put before the House by way of a Statutory Instrument. If this were done, many of the fears which hon. Members have expressed would be met. If the negative procedure were adopted, we would have an opportunity of raising directly with the Minister anything which seemed to us to be unfair to any section of the racing community.
The Under-Secretary said that the matter would, in any event, come under Parliamentary scrutiny. That will be so, but it will mean hon. Members having to ask Questions and initiating Adjournment debates. I hope that the Under-Secretary will at least make sympathetic noises about regularising the procedure; and then, in Committee, perhaps the Government will accept an Amendment along these lines and so meet the anxieties which have been expressed, particularly by the small bookmakers—or by the small bookmakers who are left—and other interested parties.
I expect that many hon. Members have received complaints from bookmakers about the abolition by the Bill of the criteria governing their capacity to pay the contributions levied on them. This has been done in the Bill by deleting a provision which appeared in the earlier legislation. It is a pity that an explanation about this was not included in the Explanatory Memorandum to the Bill, but at this late hour I will not pursue the matter.
The Under-Secretary gave an assurance about the deletion of the criteria

by saying that the matter would be considered by the Home Secretary when any scheme was devised. The fears which have been expressed on this score, particularly by the bookmakers, would be allayed if such an assurance were written into the Bill. The hon. Gentleman's remarks will have been noted, and we gather that this will be a factor to be taken into account, along with the profit considerations, by the Home Secretary.
I will not go into the question of the need for new enforcement provisions. One can keep an open mind on this matter until the Committee stage. I will not delay the House further, since the Under-Secretary will want as much time as possible to answer the many questions that have been asked. For example, he will no doubt wish to comment on the remarks of my hon. Friend the Member for the City of Chester about a duty which would help the whole of sport—the interesting idea of consolidating the levy and the duty—and the comments of my hon. Friend the Member for Bromsgrove (Mr. Dance)—about differentiating between on-course and off-course bookmakers.
The Bill is somewhat of a curate's egg. We shall be vigilant and hope to make it a good Bill by amending it in Committee.

11.35 p.m.

Mr. Albert Booth: I believe that this Bill is before the House because a dispute exists between the Horserace Betting Levy Board and the bookmakers. I may be prejudiced by my experience of industrial disputes, and rather suspicious of Government intervention in disputes. However I feel that we have here a dispute between two parties which have a mutual interest in the continuation of horseracing. Therefore, we should be extremely reluctant to engage in legislation which attempts to resolve this dispute.
Clearly, the Horserace Betting Levy Board has a direct interest in the maintenance of horseracing. If it died, the Board would go out of business. Similarly, if horseracing died a great many bookmakers would go out of business, and so they have an interest in keeping it going. I cannot imagine that those who place bets upon horses would find it nearly so attractive to place bets with


bookmakers for example, on the results of municipal or General Elections. It seems that we are intervening in an area when we might more properly stay out, and leave the parties with a mutual interest to settle the matter.
I do not think that this Bill will settle the dispute. All that it could do is shift the grounds on which the battle is fought, and to introduce new personalities. It would place the Home Secretary in the position of being the arbiter of the scheme whereby money was collected from the bookmakers and placed in the hands of the Horserace Betting Levy Board. This would be an unwise step, because one would have one Minister determining the amount to be collected from bookmakers for the purpose of paying the levy and thereby, inevitably, in a position which might militate against the ability of the Chancellor to collect tax from the bookmakers for a much wider purpose, to which the vast majority of the community would subscribe.
I am certain that there are more of my constituents who subscribe to the idea of taxation being collected on betting for the support of a wide range of social activities, maintaining schools and hospitals and many other services, than there are who support the idea of taxation for the purpose of supporting betting. I very much doubt whether the majority of my constituents draw the fine distinction between the horseracing levy and a betting tax. I doubt whether the bookmakers would actually object to the terms of the Bill, in so far as they make the Home Secretary the arbiter of the scheme, provided that there were safeguards in the Bill against what bookmakers consider to be excessive levies. Most of the objection to the Bill, so far as it comes from the bookmakers, is because it does not contain what they consider to be adequate safeguards.
They recognise that horseracing on the course is the raw material on which their activities are based, and, therefore, they will go along with schemes which are not so unduly expensive as to put them out of business but provide sufficient money to keep horseracing alive. We have a different responsibility. Ours must be to the community at large first, and to those who want to own horses or bet on them, or run bookmaking establishments, second. In the wider interests of the

community we must look with careful scrutiny and with a certain amount of suspicion at any form of levy or taxation devoted to specific purposes to which the whole of our community would not subscribe.
I looked somewhat askance when it was suggested by an hon. Member that one of the reasons why we should support this Bill was that stable lads are poorly paid. I can assure the House that if this Bill contained a Clause which said that the Horserace Betting Levy Board should make a grant to trainers subject to their paying their stable lads proper wages and giving them decent hours—such as not being able to require them to get up at crack of dawn more than a certain number of times a week—then I would regard the Bill with a great deal more favour.
I have not had a lobby from stable lads in favour of the Bill because it will give them better conditions. As the Board proposes to devote any increased levy it may derive under the terms of the Bill to give increased prize money to owners, the House has a duty to consider whether the owner needs the additional money. If the owner was so desperately in need of the money that he was a dying breed, we could have a different attitude towards the Bill. He is not a dying breed but an expanding one. He is expanding more rapidly than the economy. He has increased in numbers from 6,300 in 1959 to 7,700 in 1968. The number of horses owned has increased from 9,000 in 1962 to 11,000 in 1968. These facts do not convince me that owners need a considerable increase in the sum given to them by the Board to enable them to exist and sustain the support.
My understanding of the proposals is that £800,000 of the increased levy will be used to double the grants to owners in the form of prize money. As one who does not claim to know much about racing—

Mr. Kitson: That is obvious.

Mr. Booth: Hon. Members opposite may have great knowledge of racing but they know much less about other subjects which are dear to the hearts of my constituents. If it were desired to ensure by legislation that there were more


owners and better conditions in training establishments, it might be better to produce legislation to ensure that money distributed by the Board did not go solely to top prize winners but was spread more evenly throughout the industry.
With a view to having some equity within the community, I ask my hon. Friend the Under-Secretary to refer to the National Board for Prices and Incomes the incomes of the owners who are to get this extra £800,000, because I do not know of any other small section of the community who under legislation will be getting such a large increase this year.

Mr. Dance: The hon. Gentleman's figures are wrong. It is £487,000. The benefit to owners will amount to £10,583. I gave these figures earlier.

Mr. Booth: My understanding is that the increase in levy is of the order that I have indicated.

Mr. Dance: The increase in levy will indeed be that, but it is to benefit other aspects of racing—stable lads, gatekeepers, programme sellers, improvements in racecourses, and so on. About £11,000 will go into the pockets of the owners of racehorses in prize money.

Mr. Booth: It might save the time of the House if the hon. Gentleman and I were to exchange the sources of our figures afterwards. I will not be dogmatic in my contention about the distribution of the money. However, I understand that it is certainly a proposal of the Board's that a substantial amount should be used to increase prize money. I think the intention is to double the contribution the Board makes to prize money. I know of no proposal by the Board that part of its increased revenue should go directly to stable lads. If they get anything, it will be incidental.

Mr. Kitson: The hon. Member should recognise that there is an agreement between owners that if they win a race a percentage goes to the jockey, a percentage to the trainer and a percentage to the stable. Surely, he appreciates that if the stake is increased, the jockey, the trainer and the stable will benefit. This is recognised by everybody in the racing

industry even if the hon. Member is not prepared to accept it.

Mr. Booth: I bow to the hon. Member's superior knowledge of the arrangements within the industry, but it does not attract me as a trade unionist to have it suggested that on a gamble somebody's income—

Mr. Kitson: It is not a gamble.

Mr. Booth: —on a gamble—I insist —somebody's income, that of a stable boy, will depend. Therefore, it seems to me that the Bill is fraught with objections—the objection to its effect on general taxation—

Mr. Arthur Lewis: If my hon. Friend will see me afterwards, I will give him the names of 10 owners, all in the Surtax range, who have had hundreds of thousands tax-free. Then, if the hon. Member for Richmond, Yorks (Mr. Kitson) can tell me of one stable lad who has had £100,000 tax-free, we can try to get parity. I know of no stable boy who has had it.

Mr. Booth: I will certainly see my hon. Friend afterwards. However, if between now and the time I see him there is a Division on the Bill, I must indicate my view by saying that there are basic objections to it in its effect on general taxation for wider public purposes and its failure to guarantee that certain laudable interests within the industry are met.

11.47 p.m.

Mr. Elystan Morgan: We have had a spirited and wide-ranging debate and I am grateful for the support, albeit qualified, which has been given to the Bill on behalf of the Opposition Front Bench.

Mr. Temple: On a point of order. Does not the Under-Secretary require the permission of the House to speak a second time, Mr. Deputy Speaker?

Mr. Morgan: Further to the point of order. I apologise to the hon. Member for his having had to point that out. With your leave, Mr. Deputy Speaker, and that of the House, I should be grateful if I might be allowed to speak.

Mr. Temple: Perhaps that hon. Gentleman would like to explain why the


Home Secretary has not been present during this important debate.

Mr. Morgan: I cannot answer for my right hon. Friend in this matter. I know that he has a number of commitments. I do not think that any comment should be made as to why senior performers, if one might so describe them, have not appeared on either Front Bench.

Mr. Arthur Lewis: Further to the point of order. There is a point of principle here, Mr. Deputy Speaker. I agree with the hon. Member for the City of Chester (Mr. Temple) that my hon. Friend the Under-Secretary has not yet been given permission to speak again. That practice is usually followed when there are special reasons or extenuating circumstances, but there are several Ministers in the Department, not only the Home Secretary but several others. No other Home Office Minister has been present. Surely, another Minister could have replied. I am not against my hon. Friend, but if this is such an urgent and important Bill, could we not have had some of those other Ministers? I am not so sure that I shall agree to allow my hon. Friend to go ahead. I object. I do not give permission to him to reply.

Mr. Deputy Speaker (Mr. Sydney Irving): The hon. Member is too late. Mr. Morgan.

Mr. Lewis: I am sorry, Mr. Deputy Speaker, but my hon. Friend had not at that stage asked for permission, and he has to ask for permission. I object. He has not yet asked for permission.

Mr. Deputy Speaker: The hon. Member is correct. The Under-Secretary did not ask at that time. My attention was drawn to the fact. The Under-Secretary immediately asked for the leave of the House, and no one objected.

Mr. Lewis: Further to the point of order. I am sorry, Mr. Deputy Speaker, but when you look at HANSARD you will find that the hon. Member for the City of Chester raised his point of order, then my hon. Friend said that he was sorry that he had omitted to ask for permission and he went on to explain why the Home Secretary was not present. At no time did he ask for the permission of

the House. Therefore, it was not put to the House to give hon. Members a chance to object. I was waiting to object. [HON. MEMBERS: "He did ask."]

Mr. Deputy Speaker: I must rule that the Under-Secretary has the leave of the House. It was sought and it was given.

Mr. Morgan: I am grateful to you, Mr. Deputy Speaker, and to the House for leave to speak again, if only to enable me to reply to many specific points which have been put to me by my hon. Friend, and put in the form of direct challenges, and I am sure he put them with the intention that, with the leave of the House, I should do my best to reply.
There have been so many matters raised in this debate that I shall try to be selective in response to them, and I am sure the House will understand that I am not choosing the ones easiest to reply to but rather matters which are such that they should be mentioned in a Second Reading debate, rather than in Committee, and are, perhaps, more worthy than others of reply.
First of all, let me mention matters which were alluded to by the hon. Member for the City of Chester (Mr. Temple). He referred to the Benson recommendations and rather relied upon them in support of his contention that Parliament should not countenance giving support to any change in the basis of levy, in that it should be charged upon turnover. I would remind him, with regard to the Benson Report, that this was a very full and lengthy Report, but that on the question of the financing of racing it recommended a levy of not less than £8·8 million, which would have been equivalent to 1 per cent. turnover on horse racing.
The hon. Member also referred, as did many other speakers on both sides of the House, to the levy for the period from April, 1969, to April, 1970, which would raise the sum to £3·84 million. I should like to stress again, as I did in an intervention in the speech of (he hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight), that this should not be regarded as a fixed and final figure at all. It can be a fixed and final figure only if this Bill is defeated. If this Bill becomes law, then it is a matter for the discretion of the Home Secretary, and that discretion, as the


Bill now stands, is an unfettered one. There are all manner of considerations which he is entitled to pay heed to before coming to his decision.

Mr. Temple: Is the hon. Gentleman aware that the Chairman of the Levy Board has published details of how that money will be distributed? So the Chairman of the Levy Board must be extremely confident that he is to have that amount to distribute. Otherwise he would not have gone into such detail of its distribution.

Mr. Arthur Lewis: Confident of the passing of the Bill, too.

Mr. Morgan: Whereas the Chairman of the Levy Board has a great deal of jurisdiction under the current law, his jurisdiction in that respect will be very considerably diminished if and when the Bill becomes law.

Mr. Walden: Never mind about the Chairman of the Levy Board. What my hon. Friend says about the discretion of the Home Secretary is perfectly true. None of these is a matter for the House. What my hon. Friend is saying to us is that we pass legislation on the understanding that it will then be left to the discretion of the Executive. It is exactly that point to which I am calling the House's attention.

Mr. Morgan: I have made this point before. I am not sure whether my hon. Friend was in the House or not—

Mr. Walden: I was.

Mr. Morgan: I apologise. Nevertheless, for seven years this matter has been entirely outside the ambit of the House's scrutiny. We are now bringing it into the ambit of the House's scrutiny, and, no doubt, arguments will be put in Committee, if the Bill is passed on Second Reading, that it should be brought more directly into the ambit of the House's scrutiny every year. But that is another matter.
A third point was made by the hon. Member for the City of Chester when he asked why should it be the Home Secretary, why should it not be some other Minister. The reason for this is mainly historical. The Home Office has for a long time been responsible for certain

functions in relation to betting and gaming. I am afraid that one must look upon the Home Office as a net that catches all manner of duties and functions which do not belong specifically to any other Department. Only such a phenomenon explains why a good Presbyterian like myself at an hour near to midnight is detaining the House of Commons on the subject of the Horserace Betting Levy Board.
My hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) asked why Parliament should be involved in this matter at all; was it not an issue between two sets of horseracing interests, the Betting Levy Board and the bookmakers? It is not right for me to go into the basic theology on this because I contend—and I hope no one will accuse me of being over-legalistic—that this matter was settled by the House in 1961. We are dealing now with how the will of Parliament, expressed more than seven years ago, can be carried out. That is the real issue before the House.
The hon. Member for Bromsgrove (Mr. Dance) asked how the money is spent. I am sure that he is aware of the relevant part of the Betting, Gaming and Lotteries Act, 1963, and of Section 25 of that Act. Nothing in that section is changed. In practice the money is spent on modernisation of race courses, on prize money, on transport, on race course technical services, on a service that is responsible for the suppression of doping, on veterinary science research, on breeding and on the 1964 benefit scheme.
My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) said that he had no connection whatsoever with any bookmaking interest. We accept what he says and welcome the detached and objective contribution which he made, albeit at a high decibel level. He said that the Bill should not be described as the Horseracing Betting Levy Bill but as Lord Wigg's Charter for Wealthy Racehorse Owners. I now understand that he does not intend to divide the House—

Mr. Arthur Lewis: I do not know where my hon. Friend gets this idea. He evidently has told the Whips that I was dividing the House. I wish that he had told me that, as I knew nothing about it.

Mr. Morgan: I came to that conclusion from the fervour and the fury that my hon. Friend managed to instil into his remarks in attacking the Bill. He saw no virtue in it; he saw every evil in it. I hope that I am not pushing him into doing anything which he did not intend. He saw no reason why the Bill should be passed. I put it to him that if the Bill is not passed it will remain in practice Lord Wigg's Charter for whatever it might be, whatever it was under the 1963 Act; if it is passed it ceases to be Lord Wigg's Charter.
The other point in my hon. Friend's speech about which I should comment is in relation to bloodstock. I was asked to tell the House what the balance of payments was in this matter. I am afraid that I have no detailed information. At the moment the value of exports is running at about £1 million per annum. It may be slightly over that. It is likely that the value of imports is lower. I am sorry that I have not been able to be more specific.

Mr. Temple: I might point out to the hon. Gentleman that no differentiation is made between racehorses and all other quadrupeds in these export figures? They may relate to horses which are exported to Belgium for slaughter. Those figures are never used by responsible authorities in the horseracing world.

Mr. Morgan: I may be wrong about that and, if I am, I will write to the hon. Gentleman. I understand that that is the figure for bloodstock, but I am willing to be corrected on the point, and I will check the matter further.
I agree with the substance of the speech of my hon. Friend the Member for Brixton (Mr. Lipton). He made the point that one effect of the Bill would be to move the main burden of the levy from the small bookmaker to his more substantial brethren. I could not agree more with him in that respect. The scheme has been designed so as to reduce the liability on the small bookmaker and increase it in relation to turnover on the larger bookmaker; and the old flat rate, which must be disproportionate to the turnover of the small bookmaker, has been abolished.
The hon. Member for Brierley Hill (Mr. Montgomery) and the hon. Member

for Birmingham, Edgbaston (Mrs. Knight) said that there was great danger if that was not the Bill's intention, of a move ultimately towards a Tote monopoly. With respect to them, that is completely ridiculous. I hope that they will be disabused of that misconception. I should have thought that bookmakers looking intelligently at the Bill would regard it as a safeguard for their interests. They will be given every opportunity to put their case before decisions are reached by the Secretary of State, and there is no reason to suppose that he will simply endorse the Board's wishes.
The argument is all the more ridiculous when one considers that this year the Tote is contributing 1½ per cent. of its turnover to the levy, and that that compares with one-quarter per cent. contributed from the turnover of bookmakers. Even with the increase, the percentage contribution of bookmakers will be below one-half per cent. of their turnover. It is proper to keep a sense of perspective in relation to these matters.
My hon. Friend the Member for Birmingham, All Saints (Mr. Walden), in a very lucid and well-argued speech, put forward a number of propositions. He argued with clear and understandable logic. But I am afraid that, on each occasion, he was basing that logic on an initial hypothesis that was completely fallacious and impossible. His first contention was that, inevitably, it would lead to illegal betting. It would, if his initial hypothesis that it would destroy the small bookmaker were correct. From what I have explained already about the revised scheme of levy, I am sure that he will acknowledge that that could not possibly be so.
My hon. Friend gave us a lecture on the morality of legislation, saying that solemn safeguards had been given in 1961 and that we were now not entitled to amend that Act in any way. Parliament, as we know, is sovereign. It is entitled to amend or to repeal any Act, with one exception. I am not sure whether it is constitutionally possible to amend the Act of Succession of 1701. That is a very academic point. But I do plead that the substance of the safeguards still remains. I am sure that no hon. Member would put forward the proposition that, provided we maintain the


substance and the character of those safeguards, we should not change the letter of the law when we are passing amending legislation.

Mr. Walden: The safeguards to which my hon. Friend refers so cavalierly in his lucid speech were reinforced a good deal more recently than 1961. I understand that, although it is right that Parliament has the right to do what it likes, if, when we abrogate safeguards, we want to maintain trust, we should do so by consent. That has not been done. That was my point.

Mr. Morgan: I am afraid that this point will have to be pursued further in Committee. My case is that safeguards have not been abrogated.
I do not want to commit the sin of over-repetition, but I maintain that safeguards that are necessary to be spelt out in detail when dealing with three Government appointees not responsible to the House of Commons are not necessary to be spelt out in the same detail, although relevant—and I am sure that in practice they will be present in the mind of the Home Secretary in coming to his decision—to a Minister who is answerable to Parliament. It is not a question whether the safeguards are abrogated, but whether it is necessary in a different situation to spell them out in such detail.
The hon. Member for Colchester (Mr. Buck), speaking for the Opposition, has given his general blessing to the Bill, but he has raised one or two small matters. He said that he had some doubt whether the Home Office would have the necessary expertise concerning the decisions that it will have to make in this matter. I would merely draw to his attention Clause 1(5) and Clause 4(2) of the Bill, both of which are pretty similar in structure:

Before determining a scheme … the Secretary of State may appoint one or more persons to enquire into, and report to him their opinion on, any matter appearing to him to be relevant to the form or content of the scheme.
My right hon. Friend, therefore, has access to all expert opinion that would be necessary in this connection.
The hon. Member for Colchester also said that he hoped that the Home Secretary would implement his decision annually by way of Resolutions, negative or positive, that would be laid before this House. Without unduly raising his hopes, I can tell him that we will look again at this matter. However, I do not think that this is either appropriate or necessary.
My hon. Friend the Member for Barrow-in-Furness (Mr. Booth) said that this was a dispute within the industry. This is a dispute between large book-making interests and Parliament. That is the real issue. I do not want to be over-legalistic—and I have sought not to be—but we are told that we are reversing decisions. We are reversing certain decisions, as I have tried to point out, but basically we are not changing the structure of things as laid down in the Betting Levy Act, 1961, and in the Betting, Gaming and Lotteries Act, 1963.
The functions of the Betting Levy Board remain the same. The purposes for which it is entitled to raise money remain the same and the categories upon which it is entitled to expend money remain the same. I invite the House to support the Bill.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

NATIONAL SAVINGS

Motion made, and Question proposed, That this; House do now adjourn.—[Mr. Concannon.]

12.11 a.m.

Sir Gerald Nabarro: I raise this evening the question of National Savings and the poor performance in recent years. I am keenly conscious of the fact that during this Adjournment debate no reference may be made to the need for amending legislation. I shall not transgress in that regard.
Conservative policy in this sphere has been made very clear in a recent statement entitled, "Make Life Better". I commend the statement to the Financial Secretary. National Savings should be above party controversy. The Conservative Party wrote in its booklet, on page 10, under the heading, "Increase Savings":
There is one simple way of cutting taxes. It is to increase savings. The more we save, the less we have to pay in taxes. And the less we have to pay in taxes, the more we can save. In thirteen years of Conservative prosperity, annual personal savings increased by nearly £2,000 million. Tax rates were cut by £2,000 million. The next Conservative Government will give real encouragement to new savings and to new savers. We will give relief for those to want to save regularly over a period of years. We will introduce a voluntary Save-As-You-Earn scheme.
That is a statement intending to convey that my party believes in substituting for a measure of P.A.Y.E. a measure of S.A.Y.E.—a very laudable sentiment, having regard to the fact that every Chancellor of the Exchequer, of every party, in recent years has made the valid point, notably in the period before each year's Budget, that he can maintain taxes at their present level, without increasing them, or even reduce taxes, only if he can get greater personal savings.
The same statement continued:
The Conservative Government will make a real drive to encourage savings. In addition to tax relief for regular savings and the Save-As-You-Earn scheme, we will encourage more people to invest in Britain.
In the last twelve months we have seen a bigger increase in taxation in this country than has ever occurred in a comparable period of twelve months at

any time in our history. In March, 1968, taxes were raised in the Budget, related to a full year, by about £1,150 million. On 22nd November last—as if the March impost was not enough—taxes were raised by a further £250 million by the use of the regulator. The total increase in tax in the current fiscal year is about £1,400 million, related to a full year. I have always claimed that a good deal of that could have been avoided had the Chancellor really encouraged national and other forms of personal saving.
I want at the outset to quote the dismal record of National Savings under this Administration. The Chief Secretary to the Treasury at Question time this afternoon fobbed me off on two occasions when I alluded to this by quoting the aggregate of National Savings still remaining vested, at approximately £8,500 million. That is an entirely invidious figure. The aggregate has risen to that figure much more slowly in the last four years than the aggregate vested was rising in the preceding four years. I cannot do better than put in the OFFICIAL REPORT of this speech the exact figures that have been issued by the National Savings movement. They are, therefore, official figures and cannot be controverted by the Treasury. I quote them this evening first in respect of the last four years.
In 1965 National Savings increased by £73·5 million; in 1966 National Savings declined by £29·5 million; in 1967 National Savings increased by £130·6 million; in 1968 National Savings increased by £70·3 million.
In four years National Savings increased by £244·9 million, or an average increase of £61 million per annum. In the four years preceding the advent of a Labour Government—that is, the last four years of Tory rule—when money values were a good deal more by comparison—the 1961 increase in National Savings was £213·6 million; in 1962 £238·1 million; in 1963 £314·6 million; in 1964 £356·9 million; and the average over the four years was an annual increase of £281 million.
So in the four years ended 31st December, 1968, the Labour Government averaged in National Savings a surplus of £61 million per annum, while in the four years ended 31st December, 1964,


save only the last two months which I exclude, the Tory Government averaged a surplus of £281 million a year. In other words, the Tory Party's record in National Savings is four and a half times as good as Labour's during the 1960s. That is a pretty formidable indictment for this Government to refute, because the level of National Savings is always an indication of the tempo of inflation or otherwise. People do not save in National Savings when they are fearful of continuing and chronic inflation, and this is the reason why the record in National Savings has been so very bad in the last four years compared with the four years which preceded it.
I hope that the Treasury Ministers will not allege that the reason for the low level of National Savings is that personal savings as a whole have also been of a low order. On the contrary, the aggregation of sums saved by unit trusts and similar agencies has been immense, and rising year by year. It is the very unattractiveness of National Savings in present circumstances and the very attractiveness of unit trusts in present circumstances which cause the comparison to be weighted so heavily in favour of forms of personal savings other than National Savings.
I quote the unit trust figures because their rise is one of the most phenomenal circumstances of our financial history during this century.
In 1962 the increase in investments in unit trusts was only about £36 million. In 1963 it was £99 million; 1964, £58 million; 1965, £93 million; 1966, £59 million; 1967, £272 million; 1968, £619 million.
So, whereas National Savings in 1968 succeeded in putting on a sum of only £70 million increase in the aggregate sum vested, unit trusts put on £619 million advance in the aggregate sum vested, or about nine times as much as National Savings. In unit trusts measured as between the end of 1967 at £853 million vested and the end of 1968 at £1,482 million vested, figures supplied to me by the appropriate unit trust agency, there is revealed this phenomenal advance of a £619 million increase in the sum invested in a single year.
All this has caused a good deal of consternation in the National Savings

movement, which I warmly support, as the Financial Secretary knows. If my record were searched in the Treasury, it would be found that over the last 15 years or so I have often applied to the Treasury for a brief on the National Savings statistics in order to make appeals in various parts of the country for an increase in National Savings. In postwar years they have generally been buoyant, and I am the first to applaud the selfless work done by tens of thousands of public-spirited men and women throughout the country who have had a douche of cold water in the last 12 to 18 months from the poor results achieved
Sir Miles Thomas, Chairman of the National Savings movement, gave voice to apprehensions when, as reported in The Times of 9th December, he alluded to a record weekly fall. In fact, the heading on the report was:
£14 million drop in National Savings 'biggest ever'
The report said:
A fall of nearly £14 million in National Savings last week was unprecedented, Sir Miles Thomas, chairman of the National Savings Committee, said last night. A fall could be expected at this time of year "—
that is, early December, of course—
but he believed this was the largest weekly drop ever.
Not only was it a reflex of the Christmas shopping spree which rejected out-of-hand any Government exhortations not to spend, but it spotlighted the flight from money into material things. 'In today's turgid international monetary whirlpool realistic promotion of real savings is a difficult task', said Sir Miles.
The article later drew attention to the trend towards alternative forms of personal savings and said:
The result has been a growing trend for people to invest in equities, either directly or indirectly through unit trusts; in housing, in antiques and in other forms of investment which provide some protection against inflation, or quick spending in anticipation of imminent price rises.
In my words, a hedge against inflation is what everybody is now seeking, to the detriment of the National Savings movement.
The Times Business Supplement alluded to the unit trust sales on the crest of the £329 million wave in 1968—that is the figure of new investment—and said:
Looking back over the year, the feature is undoubtedly the breakthrough in winning new


customers for the industry. The big uplift in sales started long before the expansion in the number of unitholders' accounts, partly because the small holders who at one time constituted the majority of customers elected to take their profits in the early months of 1968.
But there is no doubt that the climate of financial instability, coupled with the electric pace of share movements, have conspired to persuade many who formerly were content to manage or leave unmanaged their own portfolios, to put them into the hands of professionals, of whom the most accessible are the unit trust managers.
How right they are!
I quote from the Unitholder of January, 1969. At the head of the league of top performing unit trusts I see the Oceanic Growth Trust, which showed a rise of 74·9 per cent. in a year; Target Financial showed a rise of 74·2 per cent.; M. & G. Special, 69·1 per cent.; Ebor Capital Accumulator, 57·5 per cent.; City of London, 57·2 per cent.; Scotfunds, 57·2 per cent.; M. & G. Magnum, 56·9 per cent. and so on.
I shall not go on quoting them. In order that the Financial Secretary, who knows a great deal about these matters outside the House as well as inside, should not accuse me of making an invidious or unfair comparison between these unit trusts and National Savings, I say that these figures are subject to Capital Gains Tax and to other forms of taxation which are not applicable to National Savings Certificates or Premium Bonds. Therefore, these figures of percentages gained in a single year must be discounted in respect of taxation, but even with maximum discounting in respect of, for example, top surtax payers, and for all other forms of direct taxation, these trusts to which I have alluded still show a growth after tax of more than 40 per cent. in a single year, whereas the National Savings Certificate has to put up with a few per cent. growth, according to the time the investment has been held.
These unit trust values are growing, especially if they are the "growth-accumulator" type of trust, at many times the rate of National Savings Certificates.
I cannot advocate legislation during an Adjournment debate, but my appeal to the Financial Secretary is that he should make representations to the Chancellor urgently to include in his Spring Budget or earlier, schemes of Saving-As-You-Earn which will be comparable in

attractiveness to the highly advertised and intensively promoted accumulator-growth types of unit trust which are in popular vogue and which now attract not tens of thousands or hundreds of thousands but millions of supporters in the country. If the National Savings movement is to survive it is imperative that it should compete with the private enterprise unit-trust form of saving, which has now become extremely popular, as shown from the figures I have given. Without advocating legislation, I suggest that what we need is a form of contractual savings for National Savings requisites, with attendant tax relief, which will, after tax, match the rate of growth of unit trust investments.
I commend these proposals to the good sense of the Financial Secretary, with his known record of achievement in financial circles before he entered the Administration. He knows very well what I am talking about, and that every figure is correct, and I hope that I shall receive from him an unpolitical and a hopeful reply which will encourage continued support for the National Savings movement.

12.28 a.m.

The Financial Secretary to the Treasury (Mr. Harold Lever): The House is grateful for the fact that the virtue of the hon. Member for Worcestershire, South (Sir G. Nabarro) is not a fugitive or cloistered one, and that from time to time he, as tonight, puts us in his debt by raising, in good voice, and with considerable shrewdness, knowledge and care, a matter of great public importance, and raising it in a manner that invites the non-political reply that he suggested I make.
However, I hope the hon. Member will not mind if, as is inevitable, we have to refer to the ebb and flow of political parties as well as to the ebb and flow of savings.
I am afraid I shall disappoint the hon. Member by not elaborating legislative intentions. He has great ambitions for the National Savings movement, and has been a good friend to it. I see his difficulty in explaining how, without legislation, he could possibly ask me or the Chancellor to shower on the National Savings movement these manifold advantages which he indicates. I will do my best to give a reply which he will find reassuring or encouraging.
It is true that in the period to which the hon. Gentleman referred National Savings Certificates, Defence Bonds and so on did better than they have done in the years of the Labour Government. There is an ebb and flow in these things, and the hon. Gentleman will appreciate that what he has quoted are net figures of advance in the totals. That does not mean, therefore that only £70 million or so was invested this year. Much more was invested, but some is always withdrawn each year. What is really relevant in National Savings is the immense total of about £8,500 million invested in the movement, which performs a very fundamental rôle in our economic affairs.
What is of decisive importance for a society is not which channel of investment is selected—though, of course, the Treasury has a special interest in the National Savings movement—but the aggregate of savings by the population. It is not for the Government, with all their enthusiasm for the National Savings movement, to frown on any other avenues or media of savings. What we are interested in overall is the percentage of national income put by as seed corn in the way of savings.
I do not want to come between the hon. Gentleman and his illusions, but saving ratios in all forms of savings are as high today as they were under the Conservative Government. Indeed, one could justly claim that they were higher, taking the whole period of the Government. I shall quote briefly figures of the ratio of savings to the national income, using three-quarters of the year so as to cope with 1964. It is as follows: 1958, 4·6 per cent.; 1959, 5·3 per cent.; 1960, 7·5 per cent.; 1961, 8·5 per cent.; 1962, 7·4 per cent.; 1963, 7·3 per cent.; 1964, 7·3 per cent.; 1965, under a Labour Government, 8·3 per cent.; 1966, 8·1 per cent.; 1967, 7·6 per cent. Those figures dispose utterly of the romantic and poetic flights of the imagination so often heard and seen on television and in the newspapers about the flight from money, that unwillingness to save, the dash into antique silver and the like.
I have been flying from money most of my life. Everybody who buys anything

flies from money. As long as one takes good care to fly into it as well as from it with appropriate rhythmic balance, all is well. People in this country have not been engaged in a flight from money. They are saving at a higher percentage rate than was normal in previous years. Of course we want to encourage more saving, and of course the avenues of saving they choose to tread vary according to circumstances.
I think that the hon. Gentleman sought to make the point that it is all very well saying that the aggregate of savings and the ratio of savings to national income is as high as ever, or higher, but that people do not trust fixed interest any more. But this is not true. The hon. Gentleman quoted figures showing a decline, or tiny increase, in National Savings fixed interest lending compared with what was the case under the Conservative Government. But has he seen the figures for the building societies in the same period? A vastly bigger increase has taken place in fixed interest lending to the building societies since the present Government have been in office than anything that occurred while the Conservative Party was in office. The rate of increase has been greatly speeded up, and to a degree which quite dwarfs his figures for the decline in National Savings.
There is a reason for this. Under the present Government—and I am not trying to score party political points—house building has proceeded at a record pace, and, naturally, the money must be there to finance it. It is not surprising that the building societies have made attractive proposals to induce the arrival of money for which there is such keen demand from their customers. So there has not been a flight from money, and the so-called record of withdrawals is a trifling statistical matter of £5 million in one medium. National Savings. It represents so tiny a part of the total still remaining as not seriously to warrant the inferences sought to be drawn from that infinitesimal decline in the special week at Christmas.
The movement into equities is not unhealthy, either. Inevitably, there is a tendency in modern society for more and more people to become sophisticated enough to be aware of the risks of equity investment and the possibilities of equity


investment. The hon. Gentleman is too knowledgeable and shrewd to suppose that the National Savings movement can ever offer, except through the Premium Bond, a 74 per cent. increase in one year such as a unit trust can hold out as a possibility. But there are still vast numbers of people who want neither the risks of equity investment nor its rewards. They are catered for by the National Savings movement, the building society movement and similar movements.
What we want to do is to see that all forms and expressions of saving are encouraged. All the romantic talk about antiques, Sotheby's sales and Christie's sales and that sort of thing is nowhere to the point. The figures dealt in there are trifling compared with the stupendous sums invested in fixed-interest, let alone equity, investment in this country today—£8½ billion in National Savings, nearly £8 billion in building societies, to name just two avenues. It is not worth talking about the much sensationalised antique and silver buying, The Times index of old print prices, and so on. These are all very amusing for those who like to decorate their walls and improve their aesthetic responses, but they have no economic significance whatever.
Like the hon. Gentleman, I recognise thrift as a great virtue. It adds to the freedom of an individual. It adds to his dignity. It gives him opportunities for courageous or adventurous action not available to the man who has not the little reserve which thrift gives. It adds to his dignity particularly in the latter part of his life. I have said before, but I risk saying it again, that when a man comes to retire, however gratifying it

is to reflect that he is a one fifty-millionth part-owner of the national railway system, it is not quite the same as having a little money in the bank.
Therefore, like the hon. Gentleman, I have always been an eager partisan of saving. The Chancellor has indicated that he will look closely at all the possibilities for encouraging savings. I have promised this myself in the House, and I renew that promise to the hon. Gentleman. I am grateful to him for the way in which he opened the debate and for the enthusiasm he has for thrift in general and National Savings in particular. I promise him that his words will be carefully noted. We are hard at work considering what can be done in the sort of directions he has in mind.
This is, and will remain, a non-party subject. Both parties recognise the value of savings to the individual, the necessity of savings to the community, and the possibilities of lightening the burden of taxation. But I hope that I can send the hon. Gentleman home to his well deserved rest tonight reassured that we have not become a nation of profligates, that our people are as thrifty as ever, that, notwithstanding the high burden of taxation, so great is their income and so persistent are their virtuous habits that the ratio of saving in all its forms, fixed-interest and equity savings, runs at record levels. We shall certainly, in the spirit in which the hon. Gentleman spoke, do our best to encourage an augmentation of this process.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes to One o'clock.